Sole Proprietorship Registration in Ontario, Prepared and Reviewed by a CPA Firm

What a sole proprietorship actually is

An unincorporated business owned by one individual

A sole proprietorship is a business owned and run by one person, with no company behind it. There are no shares, no directors and no separate tax return for the business.

Why the business and the owner are the same person in law

The Canada Revenue Agency states that a sole proprietor does not have separate legal status from the business. Everything the business owns, you own. Everything it owes, you owe.

What you are registering, which is a name and not a company

In Ontario you register a business name under the Business Names Act, R.S.O. 1990, c. B.17. It records the name on a public register. It does not create a company.

When Ontario requires you to register a business name

The rule under the Business Names Act

Subsection 2(2) of the Business Names Act says an individual must not carry on business, or identify the business to the public, under a name other than their own unless that name is registered.

Carrying on business under your own full legal name

If you trade under nothing but your own full legal name, such as Priya Sharma, the registration rule does not apply. Add anything to it, such as Priya Sharma Design, and you must register.

What happens if you trade under an unregistered name

Trading under an unregistered name is an offence under the Act, and an unregistered business can be blocked from suing in an Ontario court over a contract until it registers. Banks will also ask for the registration before they open a business account.

What it costs to register a sole proprietorship in Ontario

The $60 government fee charged by the Ontario Business Registry

The Ontario Business Registry charges $60 to register a sole proprietorship business name, and $60 again to renew it every five years.

Our service fee, shown as a separate line

Our service fee is confirmed to you in writing before anything is filed, and it is always shown separately from the $60 government fee. See every fee, ours and the registry’s, in one table.

What the Canada Revenue Agency charges, which is nothing

A business number and the RT, RP and RM program accounts cost nothing to open.

The five-year term and the renewal you will forget

Registration expires five years from the date it is filed

The Ontario Business Registry states that a business name registration expires every five years. The province does not chase you for it.

The renewal window, six months before expiry to 60 days after

You can renew from six months before the expiry date until 60 days after it. The renewal fee is $60, the same as a new registration.

What happens once the 60 days pass

After 60 days you cannot renew. You file a brand new registration and receive a new Business Identification Number and a new company key, and your bank and the Canada Revenue Agency may hold the old one.

The amended registration you must file within 15 days of a change

A change of address or business activity is filed as an amended registration within 15 days. There is no government fee for it.

Unlimited personal liability, in plain terms

Your house, your car and your savings are business assets in law

A business creditor can pursue your personal property, because there is no separate company standing between the debt and you.

Contracts, leases and employee claims land on you personally

Sign a commercial lease, hire someone or take on a supply contract, and you sign it personally. If the business cannot pay, you do.

What insurance covers and what it does not

Insurance covers some claims, such as an injury on your premises. It does not cover an unpaid lease, a supplier debt or a contract that goes wrong.

How a sole proprietorship is taxed

Business income goes on Form T2125 with your T1 return

You report business income on Form T2125, Statement of Business or Professional Activities, with your personal T1 return, and pay tax at your personal marginal rate on the net profit.

The 15 June filing deadline and the 30 April payment deadline

Your return is due 15 June if you were self-employed, but any balance owing is due 30 April. Interest runs from 1 May. A proprietorship’s fiscal period ends on 31 December in most cases.

Canada Pension Plan contributions on self-employment earnings

You pay both halves: 11.90 percent in 2026 on earnings between $3,500 and $74,600, a maximum of $8,460.90, plus 8 percent on earnings between $74,600 and $85,000.

The $30,000 HST small supplier threshold under the Excise Tax Act

You must register for GST/HST once taxable supplies pass $30,000 in a single calendar quarter or over four consecutive calendar quarters. See how to register for HST, at Gondaliya CPA.

How we prepare and file your registration

The intake form and the name check

You complete the intake form. A CPA reviews the structure question first, then we search the registry for conflicting names.

Filing with the Ontario Business Registry and your company key

We file the registration online, where it is processed immediately, and send you the confirmation, your Business Identification Number and your company key.

Your Canada Revenue Agency business number and program accounts

We open your business number and only the program accounts you need.

The point at which incorporating becomes the better answer

When your profit exceeds what you need to draw personally

A corporation pays the small business rate on active business income up to the $500,000 limit and lets you leave the rest in the company. See incorporate in Ontario for $35 plus the $300 registry fee.

When a customer, landlord or lender asks for a corporation

Many commercial customers, landlords and lenders will only contract with a corporation. That request usually settles the question.

When you take on a first employee, a lease or real risk

Each of these creates a personal obligation in a proprietorship. In a corporation it sits with the company.

When a second owner joins, because a proprietorship has only one

A proprietorship has one owner. Two owners are a partnership or a corporation. See corporation against partnership.

Moving a sole proprietorship into a corporation

Transferring the business on a tax-deferred basis under section 85

Section 85 of the Income Tax Act lets you transfer business assets, including goodwill and equipment, into a corporation without triggering an immediate gain, provided the election is filed with the Canada Revenue Agency and the values are set correctly.

What happens to the business name registration afterwards

The registration does not move across. The corporation registers the name itself, and the proprietorship registration is cancelled at no government fee.

What it costs to incorporate in Ontario instead

$335.00 in total: our $35.00 fee with HST included plus the $300 government fee. See what is due after your certificate arrives.

Sole proprietorship against a corporation, side by side

Cost, term and paperwork compared

A proprietorship costs $60 and is renewed every five years. A corporation costs $335.00 with us, never expires, and files an annual return and a T2 each year. A numbered company needs no NUANS report.

Liability and tax compared

A proprietor carries unlimited personal liability and pays personal rates on all profit. A corporation limits liability and pays the small business rate on retained active income.

Which one a CPA recommends, and when

A proprietorship for testing an idea with little risk and modest profit. A corporation once profit, risk or a second owner arrives.