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The Legal Process for Business Start-ups

Every day in Ontario, people are striking out on their own and starting new businesses. During the pandemic especially, many Ontarians have been seeing the value of working from home and/or having some added financial security. But to start any business, there is a legal process that must be followed if you are to avoid fines for violations or penalties from Revenue Canada.  

In this article, we will discuss a few of the things you will need to do if you are starting a new business in Ontario.  

Develop a Business Plan 

Since each business is unique, there is no singular way to make a business plan. That being said, your business plan should be something that will help you keep your business on track and it should include things like your overall goals and strategies for your business. A business plan will be important for taking out a business loan.  

Consulting a corporate lawyer will help to ensure that any legal issues that are a part of your plan are covered sufficiently.  

Name your Business 

Now that your plan is in place, you will want to choose a business name and have it legally registered. While choosing the right name will be important for your brand, it is equally important to ensure that the name is not already taken. To see if a name is available, you may search the Canadian business registries. If your business name is available, you may then structure and register your business.  

Structure you Business 

There are a number of structures that your new business can take. If you aren’t sure which structure is best for you, you should consult with a business lawyer and/or accountant.  

  • Sole Proprietorship – in this structure, you will have significant control over the business as its sole owner, but you will also be financially liable for the company.  
  • Partnership – If this business is owned by two or more people, this structure allows all partners to share in business profits or losses. There are two types of partnership (General and Limited) so make sure you seek out good legal advice to determine the right type for your business.  
  • Professional Corporation – if you are a licensed professional (such as a dentist or accountant), another option is a professional corporation. This structure is a type of incorporation that is sanctioned by a professional body.  
  • Corporation – this business structure is a legal entity of its own. The business makes profit or losses, is liable, and is taxed independently of its owner(s).  Before setting up this type of structure, it is important to consult with an accountant and a business lawyer.  Additionally, with this structure, your business name must include a designation e.g Inc. Ltd, Unlimited, etc.  

Register your Business 

Registering your business in Ontario can be done for a small fee with Service Ontario. When you register your business, you will receive a business license and a CRA number. Your registration will need to be renewed every 5 years.  

Additionally, you will have to sign up for a CRA business account and determine which CRA programs you are required to join. These programs will be important for various business functions such as HST remittance and payroll.  

Obtain Permits and Licenses 

Finally, you will need to look into any provincial or municipal permits or licenses that are required for you to run your particular business. These may include liquor licenses, safety inspections, etc. It is your responsibility to ensure that you are complying with all existing bylaws that may be relevant to your business.  

Contact Levy Zavet today 

There are many facets and challenges to running a business but also many rewards. And to make sure that your business gets off to a good start, it is important to ensure that you follow the start-up process legally. If you require assistance in setting up your business, our corporate lawyers can help. Contact Levy Zavet today to arrange for a consultation.