You’ve come up with a great business idea and are ready to start putting it into action in Ontario, congratulations! As an entrepreneur, your next step should be to apply for a master business licence (MBL).
While there are a lot of important things to think about as a new business owner, from landing your first clients to opening up a bank account and setting up your POS systems, it’s important to ensure that your business is operating legally from the beginning. Registering for a master business licence is a key step.
What is an Ontario master business licence?
A master business licence is a document that lists your business name, address, business number, and a brief description of your business activities. An MBL will also state the type of business you have, such as sole proprietorship, limited liability partnership, or extra-provincial limited liability partnership.
The two most common business structures that require a master business licence to operate are sole proprietorships and partnerships. If your business falls under one of these structures, a master business licence serves as your business name registration with the provincial government and provides you with a unique registration number that identifies your business.
Do I need a master business licence?
Whether you need to register for a master business licence will depend primarily on your business structure. If you are registering a sole proprietorship or partnership, and you wish to do business under a name that differs from your full name or the full names of the partners involved, you’ll need a master business licence to do so.
For example, if your name is John Smith and you wish to do business simply as John Smith, you do not need to register your business. However, if you plan to do business as something like John Smith Professional Organizing, you’ll have to register for a master business licence.
If you are planning to incorporate your business instead of registering as a sole proprietor, you typically won’t need a master business licence. However, there are some exceptions to this rule that are worth noting. For example, if you incorporate but you want your corporation to do business under some name other than the corporate name, such as a trade name, you’ll need a master business licence to do so.
For new entrepreneurs, the most common scenario requiring a master business licence is when setting up a sole proprietorship.
What does a master business licence provide?
Once you’ve submitted your registration and obtained a master business licence, you are granted the following:
- Registration with the Province of Ontario for five years, after which time you have to reapply
- A business name registration that gives you the legal right to operate under your business name within Ontario
- The ability to open a business bank account under the name that you registered
- The right to advertise under the business name that you registered and to promote your business name on marketing materials such as business cards
What are some limitations of a master business licence?
A master business licence, while important, is limited in terms of the protections it offers your business. For example, a MBL doesn’t offer name protection against other businesses in Ontario the way incorporation does. Competing businesses that are also unincorporated may operate under a similar or identical name to yours, and you may not be able to stop them legally. It also doesn’t provide you with liability protection or corporate tax advantages.
These are some of the reasons entrepreneurs choose to incorporate their business, even as a single-person corporation. If your business exposes you to a high degree of risk for personal liability, you may consider incorporating rather than obtaining a master business licence. Since a corporation is a separate legal entity, the liabilities and debts incurred by the corporation are not automatically yours.
For many types of businesses, registering for a master business licence as a sole proprietor is a great place to start.
What is the application process for a master business licence?
You can complete your business registration online, by mail, or in person at a Service Ontario location. Registering online is fast and easy, and you can do so through Service Ontario’s portal or third-party service providers like Ownr.
Keep in mind that if you choose to register by mail, the processing times for your licence to be mailed to you may be longer.
Can anyone register for a master business licence?
The registration requirements for a master business licence leave it open to most adults in Ontario.
As long as you are 18 or older, you can likely register for a master business licence in Ontario. Unlike incorporation, you don’t have to be a permanent resident or citizen yet to register.
If you are not sure if your immigration status qualifies you to apply, it’s best to check with Immigration Canada.
How much does it cost to get a master business licence?
Registering a master business licence online has a $60 filing fee while registering in person or by mail through Service Ontario costs $80.
Before registering, you may also want to generate a NUANS report to see if someone already registered another business under your name. This search report lets you know what other business names or trademarks are registered that are similar to your own.
These searches can cost between $8 and $26 depending on the records you include in your search. By registering your business through Ownr for $89, you can access unlimit