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Sole Proprietorship in Ontario
Sole
Proprietorship is the simplest and the most inexpensive way to set up a small
business in Ontario. One person performs all the functions required for
the successful operation of the business.
The small business owner must register a business name with the province if it is
different from his/her own name.
Ontario
Business name registration is valid for 5 years.
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Sole
Proprietorship
Registration
fee - $29
Government
fee - $60
GST -
$1.74
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Total:
$90.74
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Two or more persons could establish Ontario
General Partnership.
It's important to know, an owner of the
small business is fully responsible for his business debts and obligations
by his personal assets.
Thus, the business owner has unlimited personal liability.
If you
are interested to get a limited liability company protecting you from the personal
liability for your business, click
here to order an Ontario
corporation or federal
corporation.
Benefits
of Sole Proprietorships
Easy
and inexpensive to set up
Flexible
with little regulation
Directly
controlled by the owner/operator
Minimal
working capital required
Business
is taxed through owner's personal income tax, and losses can be used
to reduce taxes on other sources of personal income
Wages
payable to a spouse are deductible from the income of the business.
Disadvantages
of Sole Proprietorships
Unlimited
personal liability
Lack
of continuity in business organization in absence of owner
Difficulty
in raising capital
Owners
are taxed at individual tax rate, which is much higher than
corporate tax rate.
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