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Choosing a form of business and becoming self-employed

Region: Ontario Answer # 205

If you have decided to become self-employed, it is important to decide what legal form of business will work best for you. There are three main forms of business to choose from: sole proprietorships, partnerships, and corporations. If you are going to start a business alone, you can choose between a sole proprietorship or a corporation. If you are going to start a business with at least one other person, you can choose between a partnership or a corporation.

There are important legal differences between the three forms of business. For example, both sole proprietors and the partners of a partnership are not considered legally separate from the business. The owners are personally responsible for every aspect of the business, and any profit or loss must be included on the personal income tax return of each business owner. In comparison, a corporation is considered legally separate from its owners. In fact, the law considers a corporation to be a legal entity, much like a person. The owners of a corporation do not usually have personal liability for the debts of the business or for any lawsuits that arise and the corporation is taxed separately from its owners.

There are many other factors to consider when choosing the legal form that is best for your business. As a business grows, the advantages of the corporate business form usually outweigh the disadvantages. A lawyer can help you determine which form of business is best for your situation.

NEW Ontario Business Registry

Businesses can now complete over 90 transactions online through the new Ontario Business Registry. This includes:

  • register a new business name
  • renew an existing business name
  • dissolving an existing business
  • incorporate, dissolve and change a corporation or not-for-profit or charity
  • search for a business or not-for-profit corporation
  • file notices and other documents under other business law statutes

Currently, mailing or emailing documents is also still available.

Registering existing business: Existing businesses and not-for-profits who wish to access their profile or file documents using the Registry will require a Company Key. Businesses can submit a request for their company key at Ontario.ca/BusinessRegistry.

New businesses and not-for-profits should visit the Ontario Business Registry: all services page for instructions on how to create and register their new business.

Anyone can do a free search of the Ontario Business Registry to get basic information about a business or not-for-profit corporation.

Some offices closed

As a result of the launch of the new Registry, six service counters across Ontario will no longer endorse articles submitted under the Business Corporations Act. As well, the ServiceOntario counter at 375 University Avenue in Toronto has closed. Visit ServiceOntario for information on what offices are still open and what transactions can be completed in-person.

More info

For more information about starting a business in Ontario, visit the Government of Ontario, Business and Economy website. Visit ontario.ca for a listing of Ontario Small Business Enterprise Centre locations where you can go for help to start and grow your business.

Get legal help

For legal advice and assistance with choosing a form of business and for other business issues, contact our preferred experts at Kalfa Law, or call them now at 1-800-631-7923.



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