The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

• Simple tax structure and benefits
• Business lifespan is the same as the owner’s
• Simpler to set up than a corporation
• The proprietor or partners are directly responsible for debts related to the business
• Jurisdiction is Provincial
• Businesses do not need to appoint additional positions
• Less costly to set up than corporations

This type of business is a separate legal entity from its owner and it can be owned by one or more people.

• Complex Tax Structure and need more Expert assistance.
• Business has an unlimited life span
• More complex to set up than a business registration
• No shareholder of a corporation is personally liable for the debts, obligations or acts of the corporation
• Jurisdiction can be Provincial or Federal
• Corporations need to set out their board of directors (at least 1) and officers with an additional Initial Notice filing.
• More costly to set up than Business Name registrations

Benefits

• Limited business name protection Canada-wide
• Can operate across the country as of right, subject to provincial extra-provincial filing requirements.
• Beneficial if you plan to do business across Canada
• A federal Business Number is automatically assigned upon incorporation.

Considerations

• Federal Name Granting Guidelines are very strict and many proposed names are rejected.
• More paperwork for annual filing
• Incorporation documents can take up to (1) one week or longer to process

Benefits

• Business name protection province-wide
• More likely to get business name approval within one province

Considerations

• Can only operate within the province of incorporation as of right. Must register extraprovincially if operating out of other provinces (have a permanent office in).
• Incorporation documents can take up to (2) business days to process

A named corporation is a corporation that has a name that was chosen by its owners either at the time of incorporation, or at a later date.

• Named Corporations holds ongoing operations and help in branding business.


• Named corporation carries clear name which don’t make any confusions in creating legally binding agreements.


• Owners can use Named company name on business cards, advertisements, product packaging, etc.


• It’s relatively inexpensive to choose a named corporation. The only additional cost is for a name search, which typically costs between $45- $75

Numbered corporations are automatically assigned a number by Ontario Corporate Registry. The legal element of a numbered corporation (Ltd., Inc., or Corp.) can be chosen by the incorporator.

• Numbered corporations are typically used for holding companies that simply hold assets and carry on no ongoing business operations.


• Because the numbers are so similar, and often not very easy to remember, people tend to get the numbers wrong. This can cause problems when trying to create legally binding agreements.
• Business owners are often reluctant to use a numbered company name on business cards, advertisements, product packaging, etc., preferring instead to use trade or brand names.
• It can be expensive to change the name after the fact. The cost for changing a corporation’s name from a numbered corporation to a named corporation typically ranges from $250-$350.