A Simple Guide to Starting an Online Business in Ontario
The benefits of e-commerce have attracted many entrepreneurs to dive into the online marketplace. If you are thinking about starting an online business in Ontario but not sure where to begin, here is a simple guide to help you get started:
1. Determine your business model:
a. Business-to-Consumer (B2C): selling products or services to consumers or other businesses online.
b. Business-to-Business (B2B): selling products or services between businesses online.
2. Determine your business structure:
a. Sole-proprietor
b. Partnership
c. Limited Partnership
d. Corporation
e. Joint Ventures
For more information about business structures, click here .
3. Determine your type of online business, here are some examples:
a. Drop shipping: selling products that are manufactured and shipped by a third party.
b. Digital Products: selling products such as e-books or e-courses.
c. Digital Services: selling and providing your services online.
d. Wholesale Products: selling products in bulk to a retailer, who then sells it to a consumer.
4. Select a name for your business:
It is important to find out if your desired name is taken to avoid legal disputes. Your lawyer can do a name search on your behalf.
5. Register your business name:
If you decide to use a name other than your legal business name, you will need to register it as a trade name and a Master Business License. Note: you may also register a trademark to better protect your brand.
6. Register your online business with the CRA
If you anticipate that your sales will exceed the small business supplier threshold ($30,000), you will need to register for HST. However, you will need to register your Business Number (BN) before registering HST.
7. Determine if you need a license:
Contact a business lawyer to help you determine if you need to apply for a license.
8. Select a domain and find a hosting provider for your website:
A domain name should be carefully selected, to make sure it does not include the name of another company or product. The registration and use of website domain names are governed by trademark laws.
9. Develop a marketing plan and social media presence:
Create social media accounts for your business (Facebook, YouTube, Instagram, LinkedIn, TikTok, etc.) and follow a schedule where you post content regularly to boost your online presence.
It is important to remember that all existing laws that apply to off-line businesses, apply to online businesses. Meaning, all the laws governing incorporation, consumer protection, contractual principles, advertising, business name registration, and so on, apply to e-businesses. In Ontario, online businesses are also governed by the Ontario Electronic Commerce Act 2000 and the Ontario Consumer Protection Act 2002.
Contact a business lawyer at Kalfa Law Firm and we will help you with everything you need to know to operate your online business, including all the tax implications, such as reporting your income, using tax saving strategies, payroll, and more.
-Youstina Tawadrous, Corporate-Commercial Law Clerk
Youstina is a corporate-commercial law clerk at Kalfa Law Firm as well as a Law Society of Ontario Lawyer Licensing Candidate. Tina graduated in 2020 with an LL.B in Laws from the University of Leicester after completing a BSc. at Dalhousie University.
© Kalfa Law Firm, 2021
The above provides information of a general nature only. This does not constitute legal advice. All transactions or circumstances vary, and specified legal advice is required to meet your particular needs. If you have a legal question you should consult with a lawyer.
