Guide to Start a Business in Ontario

Starting a business in Ontario involves navigating federal, provincial, and municipal requirements.

Below is a comprehensive guide structured as a blog.

(Note: This information is for educational purposes and does not replace professional legal or financial advice.)

1. Conduct Market Research

Market research is the foundation of your business strategy. It validates your concept and identifies the risks and opportunities within the Ontario economy.

Focus on these six core areas to build a data-driven business model.

Industry Trends

Gain insights into current market conditions and economic outlooks.

• Resource: Read Business Development Canada’s (BDC) free analysis and research to identify industry-specific growth patterns.

Customer Demographics

Identify your target market by analyzing who they are and how they spend.

• Resource: Use Statistics Canada Data Tables to find population characteristics and consumer spending habits in specific Ontario regions.

Competitor Analysis

Map the competitive landscape to find your unique value proposition.

• Action: Investigate where your target audience currently purchases similar products or services. Use tools like Google Maps and industry directories to identify local and digital rivals.

Strategic Location

Your physical or digital presence must align with local economic zones.

• Resource: Contact Ontario Business Improvement Areas (BIAs) to understand neighborhood-specific foot traffic and local business environments.

Financial Requirements

Calculate the total cost of entry to avoid cash flow issues.

• Checklist: Estimate expenses for business registration, marketing, licensing, insurance, rent, utilities, and website development.
• Tool: Use the BDC Startup Cost Calculator.

Brand Identity and Domain Availability

Ensure your business name is discoverable and legally available.

• Search: Use the Ontario Business Registry search tool to see if your name is taken.
• Digital: Check domain availability through CIRA (.ca domains) to secure your online presence.

For a comprehensive deep dive into these methodologies, visit the Government of Canada’s Introduction to Market Research.

2. Prepare a Business Plan

A business plan is a strategic document that outlines your business model, operational goals, and financial requirements.

It serves as your primary tool for securing investment and guiding long-term growth.

Core Components of a Plan

Your plan must be comprehensive and data-driven to satisfy lenders and stakeholders.

• Executive Summary: A concise overview of your company mission and unique value proposition.
• Operational Strategy: Details on how you will produce products or deliver services.
• Marketing Strategy: Your plan for customer acquisition and market penetration.
• Financial Projections: Realistic 3-5 year forecasts including cash flow and break-even analysis.

Expert Advisory Services

Access professional mentorship to refine your strategy.

• Local Support: Contact a Small Business Enterprise Centre (SBEC) for one-on-one advisory services.
• Tech & Innovation: If you are building a scalable technology company, seek guidance from a Regional Innovation Centre (RIC).

Templates and Sample Plans

Utilize industry-standard templates to ensure you cover all necessary legal and financial requirements.

• BDC Template: Download the Business Development Canada (BDC) Business Plan Template.
• Futurpreneur: Access resources specifically designed for young entrepreneurs through Futurpreneur Canada.
• BPlans: View thousands of industry-specific sample business plans.

Financial Institution Tools

Most major banks in Ontario provide specialized toolkits for new business owners.

• Action: Consult your local bank branch to access their proprietary business planning software and startup calculators.
• Resource: Explore the Canada Small Business Financing Program for details on government-backed loans.

For more information on the structure of a successful plan, review the Government of Canada Business Planning Guide.

3. Decide on the Ownership Structure

Ontario offers four primary business structures. Each has distinct legal liabilities and tax implications.

Choose the model that best aligns with your risk tolerance and growth strategy.

Structure Comparison Matrix

Feature	Sole Proprietorship	General Partnership	Corporation	Co-operative
Liability	Unlimited personal	Shared unlimited	Limited to investment	Limited to member share
Taxation	Personal income rates	Personal (split)	Corporate tax rates	Member distribution
Registration	$60 (OBR)	$60 (OBR)	$300 (Provincial)	$155+ (Varies)
Control	Full owner control	Shared by partners	Board of Directors	One member, one vote
Continuity	Ends with owner	Dissolves on exit	Perpetual existence	Perpetual existence

1. Sole Proprietorships

The simplest structure where the owner and business are a single legal entity.

Pros

• Full operational control and decision-making
• Low-cost setup and minimal administrative burden
• Business losses offset personal income for tax relief
• Direct access to all profits

Cons

• Unlimited personal liability for all debts and lawsuits
• Personal assets (home, car) at risk from creditors
• No business name protection (others can use it)
• Income taxed at personal marginal rates

2. Partnerships

A business owned by two or more entities (individuals or corporations).

Pros

• Shared startup costs and pooled financial resources
• Combined skills and expertise of multiple partners
• Simple administrative requirements compared to corporations
• Income and losses flow to partners’ tax returns

Cons

• General partners share unlimited liability for all debts
• Partners legally responsible for each other’s actions
• Higher risk of management conflict and stalemates

3. Corporations

A separate legal entity from its owners. Incorporation can occur Provincially or Federally.

Pros

• Limited liability protection for shareholders
• Easier access to capital through shares and grants
• Transferable ownership and perpetual existence
• Name protection (Federal provides nationwide protection)

Cons

• Highest setup and ongoing maintenance costs
• Complex tax compliance and mandatory annual filings
• Strict record-keeping and corporate minute book requirements

4. Co-operatives

A corporation owned and democratically controlled by its members to meet common needs.

Pros

• Limited liability for all members
• Democratic “one member, one vote” governance
• Community-focused stability and profit distribution

Cons

• Slow consensus-based decision-making process
• Heavily reliant on active member participation for success

Next Steps:

1. Review the CRA Guide on Business Income.
2. Use the Ontario Business Registry to search for name availability.
3. Consult a legal professional to draft Partnership or Shareholder Agreements.

4. Register Your Business Online

If your business maintains employees, facilities, or physical offices in Ontario, you must register via the Ontario Business Registry (OBR).

This system provides a 24/7 centralized platform for business filings.

Pre-Registration Checklist

Before beginning the online application, ensure you have the following ready:

• Active Email Address: Required for all digital correspondence and receipts.
• Payment Method: A valid debit or credit card for registration fees.
• ServiceOntario Account: You must create a My Ontario Account and a ServiceOntario Account during the setup process.
• Name Availability: Conduct a Free Business Name Search to confirm your desired name is not already in use.

Registration Fees by Structure

Fees are mandatory and vary based on the legal complexity of your business entity:

Business Type	Registration Fee	Key Characteristic
Sole Proprietorship	$60	One individual owner
General Partnership	$60	Two or more partners
Ontario Limited Liability Partnership (LLP)	$60	Hybrid of partnership and corporation
Extra-Provincial LLP	$60	Already registered in another province
Ontario Limited Partnership (LP)	$210	At least one general and one limited partner
Business Corporation	$300	Separate legal entity

The Nuans Name Search Requirement

If you are registering a Business Corporation with a specific name (not a “numbered company”), you must obtain an Ontario-biased Nuans name search report.

• Compliance: Federal-biased reports are not accepted for provincial incorporation.
• Provider: Reports must be purchased from a private Nuans member.
• Validity: The report reserves your name for 90 days.

Identification Numbers: BIN vs. BN

Upon successful registration, you will receive a 9-digit Ontario Business Identification Number (BIN) from ServiceOntario. It is critical to distinguish this from federal identifiers.

1. Ontario BIN (ServiceOntario): Used for provincial incorporation, business name renewals, and import/export accounts.
2. Federal BN (CRA): A separate 9-digit Business Number provided by the Canada Revenue Agency for taxes, payroll, and GST/HST.

Next Steps:

1. Verify Filing Requirements for your specific structure.
2. Access the Official Registry Portal to start your application.

5. Confirm Licences and Permits

Operating a business in Ontario requires compliance with federal, provincial, and municipal regulations.

You must secure specific approvals based on your location and industry to avoid fines or closure.

Use the BizPaL Search Tool

BizPaL is a free centralized resource that identifies your specific regulatory requirements. Filter results by entering your city and business activities to generate a customized permit checklist.

• Federal Permits: Required for importing/exporting, federally regulated sectors, and cross-border trade.
• Provincial Licences: Mandatory for specific Ontario industries like Liquor Sales, Private Career Colleges, or Environmental Approvals.
• Municipal Permits: Issued by your Local Municipality. Common requirements include Zoning Approvals, Sign Permits, and health inspections for food services.

Compliance Strategy

1. Activity-Based Search: Input specific tasks like “serving alcohol” or “street vending” into BizPaL for precise results.
2. Verify Locally: Contact your city clerk to confirm unique bylaws or Zoning Requirements for your physical location.
3. Annual Renewals: Most municipal licences expire yearly and require updated proof of Business Insurance.

6. Confirm if You Need to Charge HST

Most Ontario businesses must register with the Canada Revenue Agency (CRA) to collect and remit the 13% Harmonized Sales Tax (HST) on taxable sales. While registration is mandatory for many, specific thresholds determine your legal timeline.

• The $30,000 Threshold: You must register for a GST/HST account if your total worldwide taxable revenue exceeds $30,000 within a single calendar quarter or over four consecutive calendar quarters.
• Small Supplier Exception: If your gross revenue remains under $30,000, you are classified as a “small supplier” and registration is generally voluntary.
• Mandatory Exceptions: Certain industries, such as taxi and limousine operators or commercial ride-sharing drivers, must register for an HST number immediately regardless of annual income.
• Voluntary Registration: Registering before hitting the $30,000 mark allows you to claim Input Tax Credits (ITCs). These credits let you recover the HST paid on business expenses like equipment, rent, and inventory.
• Registration Deadline: Once you exceed the revenue limit, you have 29 days to apply for your account through Business Registration Online (BRO).

Learn more about mandatory registration requirements and how to manage your HST filing deadlines directly from the CRA.

7. Understand Your Tax Obligations

Managing business taxes in Ontario requires coordination between the Canada Revenue Agency (CRA) and the Ontario Ministry of Finance. Your legal structure dictates your filing deadlines and specific tax rates.

Personal Income & CPP Contributions

Self-employed individuals, unincorporated businesses, and partners must report business income on their Personal T1 Income Tax Return. You are also responsible for both the employer and employee portions of Canada Pension Plan (CPP) contributions on net earnings over $3,500.

Corporations Tax

Incorporated businesses with a permanent establishment in Ontario must file a T2 Corporation Income Tax Return. This single return covers both federal and provincial corporate taxes.

• Small Business Deduction: Eligible Canadian-controlled private corporations (CCPCs) may access a reduced tax rate on the first $500,000 of active business income.

Employer Health Tax (EHT)

If you have employees in Ontario, you may need to register for Employer Health Tax.

• Exemption: Most private-sector employers are exempt from EHT on the first $1 million of annual Ontario payroll.
• Registration: Mandatory if your payroll exceeds the exemption threshold or if you are not eligible for the exemption.

Harmonized Sales Tax (HST)

The 13% HST applies to most goods and services in Ontario.

• Mandatory Registration: Required if your worldwide taxable supplies exceed $30,000 over four consecutive quarters.
• Input Tax Credits (ITCs): Registered businesses can claim ITCs to recover HST paid on business purchases.

Business Tax Credits

Ontario offers several incentives to reduce your tax burden:

• Ontario Innovation Tax Credit: A 8% refundable credit for R&D.
• Regional Investment Tax Credit: A 10% credit for businesses investing in designated regions outside the GTA.
• Ontario Made Manufacturing Investment Tax Credit: A 10% credit for qualifying investments in buildings, machinery, or equipment.

Filing & Management

Use ONT-TAXS online to manage provincial tax accounts and My Business Account for federal CRA interactions.

8. Consider Business Insurance

Business insurance protects your assets, operations, and revenue from unforeseen losses. While most types are not legally mandatory in Ontario, they are essential for risk management and are often required by landlords, lenders, or client contracts.

Core Coverage Types

• Commercial General Liability (CGL): Protects against third-party claims for bodily injury (e.g., slip-and-fall) or property damage caused by your operations. Most B2B contracts require at least $2 million in CGL coverage.
• Professional Liability (Errors & Omissions): Essential for consultants, accountants, and service providers. It covers financial losses caused by your professional advice or service failures.
• Commercial Property Insurance: Covers your physical workspace, inventory, and equipment against fire, theft, and vandalism.
• Cyber Liability Insurance: Protects against data breaches, ransomware, and cyber-attacks. This is critical if you store customer data or process online payments.

Home-Based Business Considerations

Standard homeowners’ or tenants’ insurance typically does not cover business-related liabilities or equipment.

You may need to add a business endorsement to your existing policy or purchase a standalone commercial policy if you have clients visiting your home or store significant inventory.

How to Secure the Best Rates

1. Use a Broker: Licensed insurance brokers work for you, not the insurance company. They compare multiple quotes to find the best fit.
2. Compare Quotes: Obtain at least three competitive quotes. Platforms like Rates.ca or Zensurance offer quick digital comparisons.
3. Bundle Policies: You can often save 10%–15% by bundling your business insurance with your personal home or auto policies.
4. Review Annually: Update your coverage as your revenue grows or as you acquire new assets to avoid being underinsured.

Industry Resources

• Insurance Bureau of Canada (IBC): The national association for insurers provides comprehensive guides on business coverage basics.
• BizPaL Ontario: Check if your specific industry has mandatory insurance requirements (e.g., WSIB for construction).

9. Understand the Regulations

Compliance with provincial and federal law is mandatory for all Ontario businesses. Failure to follow these regulations can result in significant fines, legal liability, or business closure.

Accessibility for Ontarians with Disabilities Act (AODA)

If you have one or more employees, you must comply with AODA standards. This ensures your services, workplace, and digital presence are accessible to people with disabilities.

• Customer Service: You must train all staff on interacting with people with various disabilities.
• Web Compliance: Websites must meet WCAG 2.0 Level AA standards.
• Reporting: Businesses with 20+ employees must file an Accessibility Compliance Report every three years.

Employment Standards Act (ESA)

The ESA sets the minimum rules for most workplaces in Ontario. Key requirements include:

• New for 2026: Employers with 25+ employees must include salary ranges and AI disclosure in all public job postings.
• Wages and Hours: Adhere to the current minimum wage and overtime pay (typically after 44 hours/week).
• Postings: You are legally required to post the ESA “What You Should Know” poster in a visible area.

Occupational Health and Safety Act (OHSA)

Every employer must take every reasonable precaution to protect workers.

• Mandatory Training: All workers and supervisors must complete Basic Health and Safety Awareness training.
• Policies: If you employ 6 or more people, you must have written, posted policies for Health and Safety, Workplace Violence, and Harassment.
• Committees: Workplaces with 20+ employees generally require a Joint Health and Safety Committee (JHSC).

Privacy and Data Protection

If your business collects personal customer data (emails, addresses, credit cards), you must follow PIPEDA requirements.

• Limit data collection to what is necessary.
• Obtain clear consent.
• Ensure secure storage and mandatory breach reporting.

Industry-Specific Resources

Use BizPaL Ontario to find specific permits or regulations for your sector, such as food safety, liquor licensing, or specialized trades.

10. Get Funding or More Help

Ontario provides diverse financial aid and mentorship programs for entrepreneurs.

General Business Support

• Pro Bono Ontario: Access free legal advice for small businesses.
• Small Business Enterprise Centres (SBEC): Get one-on-one help at 47 locations.
• Starter Company Plus: Apply for training and grants to launch your venture.
• Government of Canada: Explore federal grants and financing options.
• Digital Main Street: Use digital transformation grants to adopt modern tech tools.
• Regional Innovation Centres: Specialized support for tech and innovation companies.

Employee Training

• Canada-Ontario Job Grant: Receive financial support for training new or existing staff.

Indigenous Entrepreneurs (First Nations, Inuit, Métis)

• Aboriginal Participation Fund: Support for economic development in mineral sectors.
• IAPO: Access First Nations business financing for equipment or real estate.
• Indigenous Business Toolkit: Guide for starting or expanding Indigenous ventures.
• Indigenous Entrepreneurship Startup Program: Offers loans and mentorship via Futurpreneur.
• NADF: Services for Aboriginal business development including bookkeeping and workshops.
• Waubetek: Commercial financing and economic initiatives for Aboriginal prosperity.

Black and Racialized Entrepreneurs

• Black Entrepreneurship Loan Fund: Loans up to $250,000 for Black business owners.
• Black Entrepreneurship Startup Program: Targeted financing and mentorship.
• R.A.I.S.E. Program: Supports Indigenous, Black, and racialized entrepreneurs to scale.

Youth and Students

• Futurpreneur (Ages 18-39): Apply for financing and support tools.
• Summer Company: Program for student summer businesses providing start-up money and advice.