Selling baked goods, handmade products or services from home? Here is what a sole proprietor in Ontario needs to register, what it costs, and when the $30,000 GST/HST rule applies.
Many newcomers already earn a little from skills they brought with them — baking, sewing, jewellery, tutoring, beauty services, translation or bookkeeping. What stops most people is not whether they can sell, but whether they are allowed to, and which paperwork comes first. In Ontario, the answer is simpler than most people expect. For a small business run by one person, there are usually three separate registrations to understand: your business name with the Province of Ontario, a business number with the Canada Revenue Agency (CRA), and — only once your sales pass a set amount — a GST/HST account. This guide explains each one in plain language.
A sole proprietorship is the simplest way to run a business in Ontario. You and the business are legally the same person: the income is yours, the debts are yours, and you report the profit on your own personal tax return. There is no separate company to create and no annual corporate filing. Many home-based businesses start this way and consider incorporating later, when income grows or when they want to separate personal and business liability. A lawyer or accountant can help you decide when that step makes sense.
In Ontario, a sole proprietor who operates under their exact legal name, with nothing added, does not need to register a business name. As soon as you use any other name — even your own name plus a word such as "Baking" or "Designs" — you must register it through the Ontario Business Registry. The provincial fee is $60, and the registration is valid for five years, after which you renew it. Once registered, you receive a Master Business Licence, the document banks commonly ask for when you open a business account.
A business number (BN) is the nine-digit number the CRA uses to identify your business for federal tax purposes. Registering for one is free. A sole proprietor does not always need a business number on the first day, but you will need one before you open a GST/HST account, hire an employee, or import goods commercially. You can register online through the CRA's Business Registration Online service.
In Ontario, the Harmonized Sales Tax (HST) is 13 percent. You do not have to charge it while you are a "small supplier." The CRA considers you a small supplier when your total taxable revenues — before expenses, and counting all of your businesses together — are $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters combined. Once you pass that amount, you must register for a GST/HST account and start charging tax. The CRA sets specific deadlines depending on how you crossed the threshold, so read its page "When to register for and start charging the GST/HST" as soon as your sales approach $30,000.
You can also register voluntarily before you reach the threshold. Some businesses do this so they can recover the HST they pay on business purchases, known as input tax credits. Registering also means you must charge HST to your customers and file regular returns, so speak with a tax professional before deciding.
Municipalities, not the province, decide which businesses need a local licence and what activities are allowed in a home. The rules differ between Toronto, Mississauga, Ottawa and other cities, and they usually depend on the type of business. Food, personal care services and childcare are commonly regulated, and food businesses may also need to meet public health requirements. Before you start selling, contact your city's business licensing office or your local public health unit and ask directly.
As a sole proprietor, you report business income and expenses on Form T2125, Statement of Business or Professional Activities, which you file with your personal income tax return. You pay tax on your profit, not on your total sales, so keeping receipts for materials, equipment and eligible home expenses matters. Self-employed people also pay both the employee and the employer portions of Canada Pension Plan (CPP) contributions on their net self-employment earnings — a cost that surprises many first-time business owners at tax time. The CRA generally requires you to keep your records for six years from the end of the tax year they relate to.
Ontario has a network of Small Business Enterprise Centres that offer free advice to people starting a business. Many of them deliver Starter Company Plus, a provincial program that combines training and mentorship with, for selected applicants, a grant of up to $5,000. Eligibility is set locally and commonly includes being 18 or older, a Canadian citizen or permanent resident, and not in full-time school, so confirm the requirements with the centre in your own municipality. This article is general information, not legal or tax advice; for decisions about your own situation, consult a qualified accountant or lawyer.
Registering a business is more than paperwork. It is the moment a skill becomes something you can build on: a bank account in your business name, a clear record of your income, and a foundation you can later show to a lender, a market organizer or a grant program. OIA's business and entrepreneurship programs, delivered in Farsi across Ontario, cover business skills, pricing and payments, branding, vendor and booth training, and financial literacy, and OIA's creative workshops are designed as entry points to income. Explore OIA's programs at ontarioia.ca and apply to join.
Join a community of Iranian newcomers building confidence, income and belonging — together.
Apply to Join