SOLE PROPRIETORSHIP - PROVINCE OF ONTARIO

OVERVIEW:

· Sole proprietorships are the most common and simple form of business structure. Under this type of business structure, one person owns the assets of the business and is also personally responsible for its liabilities. The owner can employ others to help in operating the business, but the owner usually manages the business himself or herself. There are few formal legal requirements to establish sole proprietorships, and they are much cheaper to create than corporations. An Ontario sole proprietorship must have its registered business address located within the Province of Ontario.

LEGAL REQUIREMENTS:

· The only legal requirement in establishing a sole proprietorship is to obtain certain licenses which are required for specific types of businesses. These licenses can range from a Vendor's Permit for collection of the Retail Sales Tax to a municipal permit for the operation of a home based business. Licensing requirements vary depending on the specific region in which the business will operate.

· If the sole proprietorship will operate under a business name other than the owner's, the business name must also be registered under the Business Names Act. This registration is relatively simple to complete and must be renewed every five years. Although there is no formal legal requirement to conduct a search of a proposed business name, it is a good idea to do so to be sure that the name which you want to use is not identical or confusingly similar to another business name already registered. This will avoid potential law suits down the road.