You don't need to incorporate to start — but know the risks.
Starting a business in Ontario can be as simple as registering a name. But a sole proprietorship leaves your personal assets exposed, and HST rules kick in once you hit $30,000. Here are the legal basics.
Free. No payment to start. This is information, not legal or tax advice.
In 30 seconds, here's what's true
- You don't have to incorporate. A sole proprietorship is the simplest structure — but you and the business are legally the same, so your personal assets are exposed.
- If you operate under any name other than your own legal name, you must register the business name. In Ontario it costs about $60 and lasts 5 years.
- You don't have to charge HST until your revenue passes $30,000. Once you cross that threshold, you must register for and charge HST.
- As a sole proprietor, you report business income on your personal tax return with a T2125 form. A corporation files its own separate return.
- A sole proprietorship does NOT protect your personal assets. If the business is sued or owes money, your personal savings and property are at risk.
How the process works
Pick a structure
A sole proprietorship is simplest but offers no liability protection. A corporation is more complex and costly but is a separate legal entity that shields your personal assets. Get advice if unsure.
Register your business name
If your business name isn't just your own legal name, register it through the Ontario Business Registry — about $60 for 5 years. Not registering can mean penalties and contract problems.
Get a Business Number and handle HST
Get a Business Number from the CRA. Once your revenue passes $30,000, register for and start charging HST — including on the sale that pushes you over.
Keep business and personal money separate
Open a separate business account. Mixing personal and business money causes tax headaches and, for a corporation, can put your liability protection at risk.
Sort out licences, contracts, and help
Check municipal and industry licences, register with WSIB if you have employees, and use written contracts. For incorporation and tax, talk to an accountant or lawyer. Start a free PLAIN session for pointers.
What to do next
- Choose between sole proprietorship, partnership, or corporation.
- Register your business name if it's not your legal name.
- Get a Business Number from the CRA.
- Register for HST once revenue passes $30,000.
- Open a separate business bank account.
- Check municipal and industry licences and permits.
- Register with WSIB if you have employees.
- Use written contracts and get tax advice.
Common myths
| Myth | Reality |
|---|---|
| I have to incorporate to run a business. | No. You can operate as a sole proprietor. Incorporation is optional and mainly adds liability protection and tax options. |
| I don't need to register my business name if I'm small. | If your business name isn't your exact legal name, you must register it, regardless of size. |
| I always have to charge HST. | Not until your revenue passes $30,000. Below that you're a 'small supplier' and don't have to charge it (though you can choose to). |
| A sole proprietorship protects my personal assets. | It doesn't. You and the business are legally the same, so your personal savings and property are exposed to business debts and lawsuits. |
| I don't need any licences. | Many businesses do. Licences and permits depend on your municipality and industry — check before you start. |
| Business and personal money can be mixed. | Bad idea. Mixing them creates tax problems and, for a corporation, can undermine your liability protection. |
| A verbal business partnership is fine without anything in writing. | Risky. Without a written agreement, partners can be personally liable for each other's actions and disputes get messy. |
| Registering a business name protects it like a trademark. | No. Registering a business name doesn't give you exclusive rights to it — that's what a trademark is for. |
Last reviewed June 2026
Written and reviewed by the founder of PLAIN, checked against primary government and legal sources. How we research these guides
Sources
PLAIN gives legal information, not legal advice. It is not a substitute for a lawyer or paralegal — and we'll point you to free ones. Laws change; we review these pages regularly, but always confirm current rules with the Ministry of Labour or a licensed professional.
Free. No payment to start. This is information, not legal or tax advice.