Should I incorporate or register my new business?

The answer to this question will depend on a number of variables as well as your personal goals and comfort levels. While we’re unable to give you a definitive answer, we can highlight a few factors to keep in mind when making your decision:

Business Registrations Incorporations
Simpler to set up than a corporation Can be more complex to set up than a business
registration
The proprietor or partners are directly responsible for
debts related to the business
No shareholder of a corporation is personally liable for
the debts, obligations or acts of the corporation
A creditor with a claim against a sole proprietor has a right against all of his or her assets, whether business or personal (unlimited liability) The corporation is a legal entity on its own and often assumes liability for debts and obligations, along with the directors and officers to a (sometimes) limited extent.
PLEASE OBTAIN LEGAL ADVICE ON THIS SUBJECT
Jurisdiction is Provincial Jurisdiction can be Provincial or Federal
Business Registrations in Ontario are valid for 5 years and
must be renewed in order to remain valid.
Incorporations do not need to be renewed but additional
initial and annual filings are necessary.
Businesses do not need to appoint additional positions. Corporations need to set out their board of directors (at least 1) and officers (who run the corporation’s day-to-day operations) with an additional Initial Notice filing.
An identical name to that of your business can be registered and name protection is more difficult to
enforce.
The corporate name is protected across Canada.
A name reservation, while recommended, is not
mandatory.
A name reservation is mandatory prior to incorporation.
Less costly to set up than corporations More costly to set up than Business Name registrations
A sole proprietor carrying on business in their own name without the addition of any other words does not need to
file a business name registration

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