How to Start a Business in Ontario: A Step-by-Step Guide for New Entrepreneurs

Here’s how to get ready to make an impact with your new business endeavour without missing any critical steps:

Quick Overview: Steps to Start a Business in Ontario

1. Create a business plan
2. Choose a business structure
3.  Check licences and permits
4. Register your business
5. Set up GST/HST and tax accounts
6. Explore funding and financing
7. Understand regulations and employment rules
8. Get business insurance

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Step-by-Step: How to Start a Small Business in Ontario

There’s more to building a successful business than having a great idea. To give your business the best chance of success, you’ll need a solid foundation – planning, research, and a few administrative steps (like registering your business and getting insurance) completed early on.

1. Create a Business Plan

A business plan is an essential document. If you’re starting small or solo, your business plan doesn’t need to be long, but it does need to be clear. Focus on what you’re selling, who it’s for, how you’ll make money, and what it will cost to get started.

In short: a business plan helps you clarify your idea, test its viability, and make smarter decisions as you grow.

Your plan should include details on everything from your company profile and market research to the physical resources the company will need (like equipment) and financials.

Your company’s road map will help you make better business decisions along the way, and it’s the document you’ll give lenders and investors if you need financing.

Because of its importance, there are several trusted resources that can help you create and refine your business plan:

• The Federal Economic Development Agency for Ontario’s business plan guide details everything from the Executive Summary to the appendices you may need.

• Once drafted, the province’s Small Business Enterprise Centres offer a review service of your business plan. You’ll get feedback, so your business plan is the best. If you’re starting a technology or innovation-based business, you’ll want to reach out to the Regional Innovation Centre too.

• Check out the resources your municipality or city may offer. Enterprise Toronto, for example, offers a Business Plan Boot Camp and webinars to help along the way. A free business plan review is also available from the city.

2. Choose a Business Structure

Businesses in Ontario can be set up in one of four ways: sole proprietorship, partnership, corporation, or cooperative.

Many first-time Ontario entrepreneurs start as sole proprietors because it’s simple and inexpensive, then incorporate later as the business grows.

• A sole proprietorship is a business owned by one person. You benefit from the profits alone, but you’re also responsible for all the debts and losses. It is the most common set-up for a new business in Ontario.

• A partnership is similar to a sole proprietorship, except two or more people own it. Decisions regarding the business and the rewards and risks are shared.

• A corporation is a separate legal entity from its owner(s). As such, it limits the personal liability of those who own the company.

• A cooperative is a corporation run by members who have an equal vote on business matters.

Each ownership structure has its advantages and drawbacks, and you’ll have to decide which works best in your circumstances initially and as your business grows.

If you’re unsure which structure to choose, consider how much personal liability you’re comfortable with today, and whether you plan to grow, hire, or seek funding in the future.

3. Check Business Licences or Permits

Licensing and permit requirements will vary by business, industry, and jurisdiction. Fortunately, BizPal is a free, government-run tool that helps Ontario business owners identify required federal, provincial, and municipal licences and permits based on their business type and location.

Operating without required licences or permits can result in fines, delays, or forced closure, so it’s worth checking early, even if you’re still in the planning phase.

Note: Having the appropriate business licence or permit isn’t the same as registering your business with the province. It is a different requirement.

4. Register Your Business in Ontario

Most businesses in Ontario must be registered. In simple terms: registering your business makes it official. It allows you to operate legally, open business bank accounts, collect taxes, and enter contracts under your business name.

For example, if your legal name and business name are both Jane Doe, you may not need to register. However, Jane Doe Consulting would require registration.

The steps to registering your business will depend on the type of business structure you’ve chosen. For example, registering as a sole proprietor or partnership is generally more straightforward than incorporating.

Regardless of the registration type, start with a name search to ensure no other businesses with the same name. Search the Ontario Business Registry to see if your chosen business name is already in use in the province. If you’re planning on incorporating, you’ll also want to do a NUANS name search.

Once the business is registered with the Ontario Business Registry, it’ll be automatically registered with the federal government as well. 

Upon registration, you’ll have an Ontario Business Identification Number and a federal business number. The latter is needed, for example, if you’re required to collect GST/HST and need to set up an account with the Canada Revenue Agency (CRA).

5. Set Up GST/HST and Tax Accounts

You’ll likely have to collect GST/HST while doing business. Registering early can make tax compliance easier as your business grows and helps avoid surprises later.

For most Ontario businesses, registering for GST/HST is a standard part of becoming operational.

It’s unavoidable for most new entrepreneurs unless you’re classified as a small supplier. A small supplier is generally a business with revenues that do not exceed $30,000 over four quarters (or one year). Even if you’re a small supplier, you can voluntarily register to collect GST/HST to avoid doing it later as your business grows.

These federal government resources can help you learn more about GST/HST:

• Do I need to register for a GST/HST account?
• How do I register for a GST/HST account?
• How do small suppliers voluntarily register for a GST/HST account?

6. Explore Funding and Financing

Many new business owners assume they must self-fund, but Ontario entrepreneurs have access to business grants, loans, and tax credits designed to help reduce startup costs and fuel early growth.

• From financing programs and grants to tax credits, the federal government lists many services for your consideration. 

• Check out potential funding opportunities from the province targeting new entrepreneurs.

• Don’t forget to tap into what your local municipal government has to offer. Many municipalities provide financial resources to eligible businesses to stimulate the local economy, and yours might be.

7. Understand Regulations and Employment Rules

Depending on your industry, you may need to follow specific provincial and federal regulations. Understanding these requirements early can help you avoid penalties, delays, or compliance issues later on, including:

• From storefronts and offices to online websites and e-commerce, learn how you can make your business accessible to all of your customers.

• Workplace safety isn’t just about providing a safe workplace for employees; it also takes into account clients who enter your business.

• Review Ontario’s Employment Standards guide when it’s time to hire employees.

8. Get Small Business Insurance in Ontario

Business insurance isn’t legally required for every Ontario business, but many clients, landlords, lenders, and partners will expect it before working with you.

Many industries also require proof of insurance before you can sign contracts, lease space, or work with certain clients.

In general, different types of insurance can be bundled into a single comprehensive policy to help protect your company, including the following coverages:

• Commercial property insurance provides coverage against physical loss or damage to your building, contents, stock, and equipment. Often, it’s bundled with business interruption coverage which pays for lost income if your business is closed for repairs due to an insurable loss, like fire.

• General liability insurance covers claims against your business for bodily injury or property damage to others. This type of coverage would apply, for example, if a customer has a slip and fall accident at your business and is injured or an employee damages property at a client’s site.

• Errors and omissions (E&O) insurance provides protection against claims from customers who allege you made mistakes or your company didn’t do something that was agreed upon, and resulted in them losing money or causing them harm in some way.

• Cyber liability insurance helps business owners recover from data breaches and cyberattacks (phishing, ransomware) that affect your technology systems and customer data.

Protect Your Future: Get Comprehensive Small Business Insurance

Starting a business in Ontario comes with enough unknowns. Business insurance doesn’t have to be one of them. With the right coverage in place, you can focus on growing your business instead of worrying about what might go wrong.

Zensurance specializes in helping small business owners in Ontario and across Canada compare coverage options and costs, understand requirements, and get insured quickly – all online. 

Complete our online application now in under five minutes to get a free insurance quote and protect your business from day one.

You can’t be successful in business without taking calculated risks, but one risk you should never take is going without liability insurance to safeguard your finances, assets, and reputation. 

Your future is bright. Let us help you protect it.

– Reviewed by Brandon Bowie, Senior Broker and Team Lead, Professional Lines, Zensurance.

– Updated February 13, 2026.