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Ontario is based in the middle of Canada and has the highest population compared to all the Provinces and Territories with 50% of the total population. Most of the small and medium-sized businesses are set up in Ontario because it is a hotspot in Canada.
If want to register a business name in Ontario, then there is no better place to set up your business, not because of the largest population but because of the following reasons.
The following are the primary benefits of registering a Business Name in Ontario:
A common reason why owners set up their businesses in Ontario is because of limited liability. Company registration in Canada as a corporation limits liability and creates protection for you, your business partners, and your employees. Sometimes things don’t work as planned.
If you are a founder, shareholder, or executive in a corporation then you are not liable for the company’s debt. A corporation has its own identity, so it is solely responsible for the debt and liabilities.
Business owners who use the same account for personal and business withdrawals, accountants called this “commingling”. Doing this can lead you to lose your protection of limited liability.
While filing tax, commingling will show your income double and for that, you have to pay double tax. Having separate accounts will allow you to maintain track of your business and personal finances. By doing this, you’ll protect the monetary losses of you and your employee.
As compared to the personal tax, corporate tax rates are lower. If you are a sole proprietor, then your earned income gets taxed on the basis of your applicable personal income tax.
Also, by registering company in Ontario, you can pay the corporate tax on the amount which is not paid as a salary to pay the lower tax. The amount you paid as a salary will only be taxable on the rate of personal finance.
However, another advantage is that you can divide the income to generate lower taxes by dividing it into categories such as charity, investment, asset purchase, etc.
By Registering a Business Name in Ontario, you can access the loans and grants which are only offered to corporations. With this, it is easier to raise funds as compared to a sole proprietorship.
However, angel investors and venture capital firms prefer corporations for investment because of limited liability. Also, they don’t want to take responsibility if any mishappening done in the future. They just want to invest their money and get it back.
To increase the capital in Ontario is to sell the securities such as stocks, bonds, and options. Here businesses are allowed to raise debt and capital, also they can trade in the open markets to raise funds.
Corporations must be aware that this process is regulated by the central government and many smaller regions. These groups have the power to suspend, fine, and expel the non-cooperating members.
In any business, there is no set limit on the member who can call them the owners except a corporation. In a corporation, there are three main parties:
It is said that the shareholders are the owners of the business, but it’s not actually meant this. To understand this here’s an example: if you have shares in Google, then you’re a shareholder owner and you don’t have the power to take business-related decisions.
If any shareholder has a 51% share in a company then he has the higher voting power. Other than this, there are owners on different titles, and transferring ownership has become easy. However, it makes the running of a business easy.
Whatever the name, a company will choose, all the rights related to the name will kept only to that company. For example: Nike has all the right to their name.
Some businesses don’t receive this type of protection such as Sole Proprietorship and General Partnership. Corporations have to go through a name-selection process and show prove that their chosen name is unique.
These are the benefits of starting a business name in Ontario. We at Registrationwala, provide an end-to-end incorporation service for Company Registration in Canada by assisting businesses in:
Reach out to our incorporation experts to ask any queries and start your business in Canada.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
