Sole proprietor or corporation?

Updated September 28, 2026

Most new Ontario businesses start as one of three structures. Here's how they compare. An accountant can tell you which suits your numbers.

	Sole proprietor	Partnership	Corporation
Ontario setup cost	$60 name registration (or $0 under your own name)	$60 name registration	$300 online, plus a NUANS report for a named corporation
Personal liability	You're personally responsible for business debts	Partners are personally responsible	Generally limited to what you put in
Taxes	Business income goes on your personal return	Each partner reports their share	Separate corporate tax return; you pay yourself salary or dividends
Paperwork	Lightest	Light, plus a partnership agreement	Most: annual returns, minute book, separate accounts

Rules of thumb

Testing an idea with little risk: a sole proprietorship is cheap and simple, and you can incorporate later.
Signing a lease, hiring, or taking on real liability: talk to a lawyer about incorporating first.
Going into business with someone: write a partnership or shareholder agreement before you start.

General information, not legal or tax advice.

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