How to Open a Business in Ontario
Opening a business in Ontario
may seem like a challenging task, but it is in fact easy, due to the variety of resources offered to new entrepreneurs. The Ministry of Government Services and the Small Business Enterprise Centre, for example, provide valuable information and assistance to entrepreneurs.
There are some challenges you have to consider as well. These include taxation, financing, regulations, management, advertising, and others. First, you should know that you can go about opening a business in Ontario
in three ways. You may start a new company, buy a franchise, or purchase an existing business. After you decide on this issue, you may want to come up with a business plan. This tool serves to outline your business objectives and explain how they can be attained within a set period. A business plan is a written document explaining the nature of your business, its location, potential risks, major competitions, and more. Having a business plan is beneficial as it provides information to suppliers, investors, and lenders, establishing credibility for your new project.
Another issue to consider is the form of business organization for your company. You can register it as a sole proprietorship, a partnership, or a corporation
. Each of these has its advantages and disadvantages. The sole proprietorship, for example, is inexpensive and easy to form, as the start-up cost is relatively low. The regulatory burden is also low, and the working capital is minimal. Owners have direct control over the decision making process, and profits go directly to them. At the same time, unlimited liability is a disadvantage, as well as the lack of liquidity. Partnerships are easy to form as well, and owners have equal share in the assets, profits, and management. You and your partners will share the start-up costs. Partnerships also go with unlimited liability, meaning that your personal assets can be used to cover a business debt. It is often difficult to find suitable partners as well. Finally, the third form to look into is corporation. Among the definite advantages are limited liability, ease of raising capital, transferable ownership, and some tax advantages. Keep in mind that corporations are closely regulated, and it is more expensive to form a corporation than a sole proprietorship or partnership. You have to keep detailed corporate records as well, filing documentation with the government every year.
Keeping these in mind, there are several steps to opening a business in Ontario. First, apply for a Master Business License, which will prove that your business name is registered in Ontario. Then, you may have to apply for a Business number, depending on the nature of your business. You need one if you will have a Harmonized Sales Tax account
, a Goods and Services Tax Account
, a payroll account, or a corporate income tax account. You will need a business number if you will use an export or import account as well. If applicable to your business, you may need to apply for a business license. Businesses that need to apply for such are beauty salons, private lenders, car rental agencies, employment agencies, and driving schools.
Once you have met all requirements and opened your business, you may want to market and advertise it. You may send press releases to various publications such as Northern Ontario Business and Canadian Business Magazine.