Update Master Business License in Ontario
If you run a business in Ontario or are considering starting one, you absolutely have heard about the Master Business License. This is a very important document that allows businesses to legally operate in Ontario. It also needs updating from time to time to continue being compliant. It doesn’t matter whether you own a local restaurant, manage a drop shipping store, or operate a handyman service knowing how to update your Master Business License is key to sustaining your business. And on this blog, we would detail everything that you need to know regarding updating your Master Business License in Ontario, who can start a business and examples of real-life business owners who need this license. We will also look at some key steps in registering and incorporating a business so that you are staying compliant as your business grows.
What is a Master Business License in Ontario?
Register Master Business License (MBL) is a document issued by the Ontario government that allows you to operate a business under a specific name. The license applies to sole proprietorships, partnerships, and certain types of corporations that do business under a business name that is different from the legal name of the owner(s). The MBL is five years in duration, and it is necessary to renew upon expiry to become a valid license.
Why You Need to Update Your Master Business License
One should update their Master Business License when their business experiences:
- A change in your business address.
- Changing the business name.
- Change of business ownership structure (e.g. from sole proprietorship to partnership).
- Addition or removal of business activities (e.g. from photography to videography).
Not updating your Master Business License can lead to legal charges and may affect your eligibility for future business loans, permits, and even trust from customers.
How to Register Master Business License Step-by-Step
If your business information has changed, here are the steps to take to register master business license:
Step 1: Review Your Current Business Information
Before making any change, ensure that you have at hand all the registration documents of your business at the time of registration. This includes your business number, confirmation of registration, and your existing Master Business License.
Step 2: Changes Requiring Amendment
Various changes requiring an amendment to your MBL:
- Business Name: Registration of a new business name and an application to amend the license.
- Business Address: Ensure that your new address is amended on the Master Business License when you move your business.
- Business Structure: Changing from a sole proprietorship to a partnership or corporation structure requires an update to your licence.
- Business Ownership: Any change in the ownership must be reflected on your Master Business License.
Step 3: File the Necessary Updates
To update your Master Business License, you can visit Service Ontario or use an authorized service provider like Online Business Registry. The online tool aids in stepping through the online process to make the updates. Once filed, the updated license is typically processed and issued within a few business days.
Step 4: Pay the Fees
There is a nominal fee to update your Master Business License in Ontario. The fee varies based on the type of update being made, but typically ranges from $60 to $80.
Step 5: Renew Your Master Business License
After you make your updates, you will receive an updated Master Business License. Make sure to keep a copy on file since this may be needed when applying for additional permits, licenses, or financial support.
Who Can Register a Business in Ontario?
Ontario is the ideal place to operate a business for entrepreneurs from all walks of life. As long as you are a Canadian citizen, a permanent resident, or a foreign national, you can start and register a business in Ontario. Having this foundation at hand, let us talk about who can register a business and the types of businesses that require a Master Business License.
Canadian Citizens and Permanent Residents
Canadian citizens and permanent residents are free to start a business in Ontario subject to compliance with requisite legal requirements. The following are some of the requirements:
- Sole Proprietorship: If you operate under your own name, you are not required to register the name of the business. But if you operate under a different business name, then you must register the name and have an MBL.
- Partnerships: will need to register business name and get MBL. There will be a need for both partners to sign the registration.
- Ontario Corporation: In case of choosing Ontario as your incorporation site, you will have to file articles of incorporation and register the corporation’s name. Sometimes, depending upon the mode of operation of the corporation, you may have to require an MBL.
Foreign Nationals
Foreign nationals can also start a business in Ontario but with specific residency requirements. For example, one can still register a business if he or she is on a work permit or any other type of temporary visa. However, incorporating Federally in Ontario requires a minimum of 25% of the directors of the corporation to be Canadian residents.
Businesses That Need a Master Business License
Businesses that operate in the following types in Ontario require an MBL: An extensive number of businesses in Ontario. Examples of other types of business:
- Restaurants: If you want to open a restaurant in Ontario, you must register your business name and obtain a Master Business License. You are supposed to do this even if you operate under a different name and as a sole proprietor.
- Dropshipping Store Owners: An e-commerce business, such as a dropshipping store, would require a business name registration if the business name was different from the owner’s legal name.
- Retail Stores: A retail store would require a business name registration in order to open up shop in Ontario, and an MBL would also be needed.
- Photography Services: Freelance photographers carrying on business under a name other than their own would have to obtain an MBL. The third scenario is when a person is carrying on a business under a different name.
- Handymen and Repair Services: Business names for handymen and repair service providers should be registered, and MBLs issued so that they can be compliant in their legal obligations to operate in the state.
Example 1: Open a Restaurant in Ontario
Consider that you are going to open a restaurant and your proposed name will be “Taste of Toronto”. You will register a new business and keep your business in compliance by:
- Registering a Business Name: The name “Taste of Toronto” is not your personal name. You have to register the business name using ServiceOntario or any online provider. You receive a Master Business License once the name is approved.
- Get a Business Number: You must get a Business Number (BN) from the Canada Revenue Agency to take care of the taxes you need to pay, such as HST and payroll.
- Update as Needed: Changes in your restaurant location or its menu and service offering would also require updating the MBL.
Example 2: Drop shipping Store Owner
Suppose you are a dropshipping store owner and deal in selling kitchen gadgets online and your business name is Gourmet Gadgets, here is what you would do.
- Register a Business Name: As the above-referred business scenario operates under a Business Name, you will have to register the said name and secure a Master Business License by visiting ServiceOntario’s website.
- Incorporate in Ontario (Optional): If your dropshipping business gets more serious, you might want to incorporate your business so you can limit your liability. Incorporating in Ontario will enable you to issue shares, gain credibility and possibly reduce your tax obligations.
- Keep Your MBL Updated: In case you are going to change the name of your dropshipping store or start selling different products, you’ll have to update your Master Business License.
Example 3: Open a Store in Ontario
For example, you would like to open a clothing boutique in Ontario. In this case, you would be required to operate under a business name, other than your own personal name. Below is what you need to do:
- Register Business Name: Say you want to open a shop and call it “Chic Boutique.” For this, you would need to register the business name and get a Master Business License.
- Add Your Boutique: With your boutique live and launched, you may want to consider adding your store to Ontario. This affords you limited liability, tax savings, and the ability to sell shares of the business.
- Stay Compliant with Your Master Business License: If you are going to launch a new location, or if you are going to add new lines to your boutique, don’t forget to update your Master Business License.
