When starting a business in Ontario, one of the first big decisions is choosing how to legally structure your business. The two most common options are registering a business name (commonly known as a Master Business Licence) or incorporating a company. Both allow you to operate a business, but they come with very different legal, financial, and operational implications
A Master Business Licence (MBL), now officially called Business Name Registration since ServiceOntario rebranded the terminology), allows individuals or partnerships to operate under a business name other than their personal legal name. It’s commonly used by sole proprietors or small partnerships looking for a simple, affordable way to start.
Incorporation, on the other hand, creates a separate legal entity. This means the corporation exists independently from its owners, offering limited liability protection and potentially more favorable tax treatment. Corporations can be set up provincially in Ontario or federally, depending on where and how you plan to operate.
In this guide, we will break down both options so you can make an informed decision that fits your business goals, growth plans, and risk tolerance.
Key Differences | Master Business Licence vs. Corporation
The table below helps you with the comparison of a master business license vs. corporation Ontario:
| Feature | Master Business Licence | Corporation |
| Liability | Owner personally liable | Limited liability for shareholders |
| Name Protection | No exclusive rights | Exclusive name within jurisdiction |
| Initial Cost | ~C$60 (5‑yr registration) | provincial + NUANS + legal fees |
| Renewal/Ongoing | Renew every 5 years (~C$60) | Annual return (~C$20) + T2 filings |
| Tax Treatment | Personal income tax rates | Corporate tax rates; small‑business rate |
| Complexity | Simple filings | Annual resolutions, minute book required |
Note: Incorporation offers stronger legal protection for your business name within Ontario, while a Master Business Licence offers minimal name protection and may allow others to use similar names.
Pros & Cons of a Master Business Licence
Note: Range shown because Ontario lets you buy the required NUANS or equivalent name report from any certified provider; quotes vary.
| Advantages | Limitations |
| Fast, low‑cost registration | Personal liability for all debts |
| Minimal paperwork and no annual returns | No exclusive claim on your trade name |
| – | Fewer tax‑planning options |
Pros & Cons of a Corporation
| Advantages | Limitations |
| Limited liability shields personal assets | Higher setup and professional fees |
| Enhanced credibility with customers and investors | Strict record‑keeping (minute book, resolutions) |
| Access to corporate tax benefits and deferrals | Mandatory annual returns and corporate tax filings |
What It Costs in 2025 (Fees & Turnaround)
Ontario’s 2025 filing fees just went up: $60 for a Master Business Licence, $300 for provincial incorporation, and $200 federally—plus the new express options that get you incorporation papers back in under two hours.
Confused by Ontario’s new $X incorporation fee and 48‑hour OBR rule? Here’s the 2025 checklist.
2025 Cost Snapshot - Ontario & federal
| Registration route | Up‑front filing fee (2025) | Name‑search cost* | Processing time (online) | Renewal / Annual fees |
|---|---|---|---|---|
| Master Business Licence (sole prop / general partnership) | $60 | Not required if you trade under your own legal name; otherwise $13–25 NUANS equivalent via private providers | Instant confirmation via the Ontario Business Registry (minutes) | $60 every 5 years to renew the licence |
| Ontario corporation (provincial) | $300 articles of incorporation | NUANS $13–60 (price varies by provider; mandatory for a named corp) | Same‑day through OBR; express services promise 2‑hour turnarounds | File an annual return ($0 fee if filed with tax return; $20 if filed separately) and update “beneficial‑ownership” register (no charge) |
| Federal corporation (CBCA) | $200 online (Corporations Canada) | NUANS $13.80 (federal rate) | 24 h standard; 4‑h express for +$100 | Annual return $12.00 online; provincial extra‑provincial filing required in ON ($0–$60) |
Consultants: Liability, Tax & IP in 2025
If you bill mostly for advice, the biggest swing factor is liability: working under a Master Business Licence means any negligence claim—think botched strategy slide or data breach—goes straight against your personal house and savings. Incorporating flips that risk to the corporation; plaintiffs must sue the company first, and directors are protected except for fraud or unpaid taxes, especially if you pair the structure with errors-and-omissions (E&O) or D&O coverage.
On the tax side, once a solo consultant clears roughly CA$120 k a year, the corporation’s combined federal-Ontario small-business rate (about 12 %) on the first $500 k of active income is far below the top personal bracket north of 50 %. Retaining surplus profit inside the company lets you defer personal tax or pay eligible dividends to a spouse who helps with admin—still workable under 2025 TOSI rules if the work and shares are “reasonable.”
Intellectual-property control is the third lever: slide decks, diagnostic frameworks, or code you create belong to you as a sole proprietor, complicating fundraising or sale; within a corporation those assets vest in the company by default, and contractor IP can be cleanly assigned, giving clients and investors clear chain-of-title.
Beneficial‑Ownership Register Checklist ’25 (or Compliance Checklist)
To stay onside in 2025, a Canadian private corporation must identify every individual who owns or controls 25 % or more of the voting shares or who otherwise has “significant control,” then record their full legal name, date of birth, address, citizenship, jurisdiction of residence for tax purposes, and the dates on which control was gained or lost (ISEDC). These details must be stored in an ISC Register kept at the registered office (or another designated location noted in the minute book) and be updated within 15 days of any change, with an annual attestation to confirm accuracy.
As of 22 January 2024, federal CBCA corporations must file a copy of the register with Corporations Canada and resubmit within 15 days whenever information changes; selected data will become publicly searchable once Bill C‑42 regulations are proclaimed.
Corporations must also furnish the register promptly to CRA auditors, law‑enforcement agencies, certain financial institutions, and any shareholder or creditor who makes a lawful request.
Directors and officers are obliged to take “reasonable steps” to obtain and verify the information—typically by sending annual questionnaires to shareholders—and to retain proof of those efforts.
Failure to keep, file, or disclose accurate ISC information can trigger corporate fines up to C$100,000, while directors, officers, or shareholders who knowingly provide false data face fines up to C$1 million and/or five years’ imprisonment (federal), with Ontario imposing separate penalties up to C$200,000.
👉 Need help building your ISC Register? Talk to our compliance team now.
When to Choose Which Structure
If you’re testing a side hustle on a small budget, a Master Business Licence makes perfect sense. For roughly C$60, you can get your trade name registered and keep compliance simple. When your liability risk is low—think freelance consulting or gigs—you avoid the extra paperwork and costs of incorporation. Additionally, incorporation often enhances your business credibility with customers, lenders, and investors, making it easier to secure financing or partnerships.
Once your venture starts to carry more risk or you’re eyeing investors, incorporating becomes the smarter move. It gives you limited liability protection, so your personal assets stay separate from business debts. Plus, a formal governance structure makes it easier to add shareholders and plan for long‑term growth.
How to Register
Master Business Licence
- Create an ON e‑Licence account.
- (Optional) Conduct a NUANS name search.
- Complete the Business Name Registration form.
- Pay C$60 and receive your BIN and licence.
Corporation
- Conduct a NUANS name search (C$13–26).
- File Articles of Incorporation (online/paper).
- Pay the provincial fee.
- Receive your Certificate of Incorporation and corporate number.
Cost Breakdown & Budgeting
To register an MBL, you’ll pay provincial fee, with an optional NUANS name‑search fee of C$13–26. Beyond that, your only other cost is a renewal every five years at the same C$60 rate.
When budgeting, remember that MBL renewal is infrequent and inexpensive. Corporations face annual returns and T2 filings, so factor in ongoing accounting support to stay compliant.
Ongoing Compliance
MBL holders simply renew their registration every five years to keep their business name active. No annual filings or minute‑book maintenance are required—just a straightforward renewal process.
Corporations, by contrast, must file an annual return with the Ontario Business Registry and maintain a corporate minute book. You’ll also submit a T2 corporate tax return to the Canada Revenue Agency, so having clear processes for record‑keeping and governance is essential.
👉 For residency rules, see our guide: What Is a Factual Resident of Canada?
Conclusion
Choosing between a master business license vs corporation Ontario boils down to your risk tolerance, budget, and long‑term plan.
At SAZ Square, we’ve helped our clients raise $21M, while producing massive results for founders as well.
For a seamless setup and expert advice, reach us and let our team handle the details. Our experts stay current with OBCA amendments and CRA rulings.
FAQ
Is there an LLC equivalent in Canada?
No. Canada has no domestic “Limited Liability Company” statute; founders either incorporate under federal or provincial law or form a Limited/Limited‑Liability Partnership (LP / LLP) if flow‑through taxation is essential. The Canada Revenue Agency classifies every U.S.‑style LLC that does business here as a corporation for tax purposes, so pass‑through treatment is lost and branch‑tax rules can apply.
Because the LLC itself is not viewed as a U.S. “resident,” treaty benefits flow only to qualifying members under Article IV(6) of the Canada‑U.S. tax treaty. If you need LLC‑like flexibility, the common workaround is an Ontario (or federal) corporation acting as general partner of an LP, which shields personal assets while preserving flow‑through income.
Investors, banks, and VCs also find Canadian corporations easier to diligence, finance, and issue equity in than LPs or LLPs.
Can I start with an MBL and later incorporate?
Yes. Many founders register an MBL to test the market, then incorporate when ready to scale. You’ll need a NUANS search and to file Articles of Incorporation.
Do I need a separate CRA business number for an MBL?
Not initially. An MBL provides a provincial BIN. However, if you hire employees or collect HST, you’ll register for a CRA Business Number.
What happens if my MBL expires?
Your trade name becomes inactive. Competitors could then register it. Renew within 30 days of expiry to avoid reapplication delays.
Can a non-resident incorporate in Ontario?
Yes. Non-residents can incorporate, but at least 25% of directors must be Canadian residents for provincial incorporation (unless rules change).
Do I need a NUANS search for a Master Business Licence?
No, it’s optional for Business Name Registration but recommended to avoid name conflicts.
Can I register multiple business names under one corporation?
Yes. A corporation can register multiple operating names under its main corporate entity.
