How to open a business account in Ontario: Your step-by-step guide

Starting a business in Ontario is an exciting venture, and a crucial step is setting up a business bank account. Many entrepreneurs like yourself face a lot of challenges along the way. This guide will walk you through everything you need, from registering your business to choosing the right bank account, and even exploring options for starting a business with limited funds. We’ll also introduce you to the Wise business account, an international account for all your business payment requirements with a transparent pay-as-you-use pricing.

What do I need to open a business bank account in Ontario?

Here’s 2 things you need to open a bank account in Ontario.

First, you'll need to register your business and gather the necessary documentation. The requirements can vary slightly depending on your business structure, but here's a general overview:

1. Register your business

Before opening a business bank account, you need to officially register your business with the Ontario government. This process establishes your business as a legal entity. You have a few options:

• Sole proprietorship: You run the business. Simple to set up, but you're personally liable for business debts.
• Partnership: Two or more people running the business together. Also relatively simple, with shared liability.
• Corporation: A separate legal entity from its owners. More complex to set up, but offers limited liability.

You can register your business online through the Ontario Business Registry (OBR)¹. The OBR allows you to complete over 90 transactions online, making the process efficient and convenient³. Registering a sole proprietorship or general partnership online costs $60, while incorporating a business corporation costs $300 online⁷.

2. Gather required documents

Once your business is registered, you'll need to collect the following documents to present to the bank:

• Personal identification: Two pieces of valid, government-issued ID, such as a driver's license and passport.
• Business registration documents: This will vary depending on your business structure:
  • Sole proprietorship/partnership: Business name registration.
  • Corporation: Articles of incorporation.
• Business Number (BN): This is a nine-digit number assigned by the Canada Revenue Agency (CRA) and used to identify your business for tax purposes. You'll need this for most business bank accounts.
• Ontario Business Identification Number(BIN): Its a nine digit number and, assigned to a business when they first register with the Ontario Business Registry.
• Partnership agreement (if applicable): A formal agreement outlining the responsibilities and liabilities of each partner.

What are the requirements to open a business in Ontario?

Yes, the core requirements are registering your business and obtaining the necessary licenses and permits.

• Register your business: As discussed above, you'll need to register your business with the Ontario government¹.
• Obtain necessary licenses and permits: Depending on your industry and location, you may need specific licenses or permits to operate legally. For example, restaurants require food handling permits, and construction businesses may need building permits.

How to choose the right business bank account

With your documentation ready, it's time to select a bank. Do shop around and compare. Here is the breakdown to compare.

Fee comparison

Bank fees can significantly impact your bottom line. Here's a comparison of some popular options:

Note: Fees and features can change. It's always best to confirm the latest information directly with the bank.

Bank comparisons: pros and cons

• Banks such as RBC, TD, BMO, Scotiabank or CIBC: Offer a wide range of services, including in-person support and specialized business advisors. They may have higher fees, but the added support can be valuable for some businesses.
• Online-Only Banks and money service businesses such as Tangerine or Wise: Typically have lower fees and more convenient online platforms. However, they lack in-person branches, which might be a drawback for businesses that handle cash frequently.

Get your Wise multi-currency business account in a few clicks

Opening a business account at Wise is free, online and easy! With Wise, you don’t lose money to monthly subscriptions or have it held up as minimum balance. You pay only for what you use. Here’s what you get for the essential and complete version for a one-time fee of 55 CAD:

You can always upgrade from the essential features to avail all Wise business features for a one-time payment of 55 CAD

Experience owning a Wise business account
with our demo >>>

It only takes a few minutes to set up your multi-currency account, and make the most of the mid-market exchange rate.

Step 1. Enter information relevant to yourself and your business.
Step 2. Share essential information about your business. This includes

• Business registration
• The business registered and trading addresses
• The industry you’re in
• Online presence
• Name, date of birth, country of residence - for all stakeholders
• Documents proving ownership of the business

Step 3. Enter essential information to verify your identity
Step 4. Set up and make a transfer as indicated on your account. Alternatively, you could pay the one-time fee and get account details in over 10 currencies.
Step 5. Wise sends you a confirmation email within 10 working days.

In case you add team members to the business account, they will need to be verified too.

Wise's has been reviewed and appreciated on public platforms such as:

• Trustpilot Canada: 4.3/5 stars with 256,776+ reviews
• Play Store Canada: 4.7/5 stars with 1.28M+ reviews

Can a non-resident open a business account in Canada?

Yes, it's possible, but the process is more complex. You'll likely need to provide additional documentation and may need to visit a branch in person. Some banks may have restrictions on opening accounts for non-residents. It's crucial to contact the bank directly to inquire about their specific requirements.

How much does it cost to start a business in Ontario?

The cost varies widely, but here are some key expenses to consider:

• Registration Fees: As mentioned earlier, these range from $60 to $300, depending on your business structure⁷.
• Operating Costs: Rent, utilities, inventory, marketing, and salaries (if applicable).
• Professional Fees: Legal and accounting services.

How to start a business in ontario with no money

It's challenging, but not impossible. Here's how:

Business ideas with minimal investment

Consider service-based businesses that require little to no upfront capital:

• Freelancing: Offer your skills (writing, design, consulting) online.
• Online Tutoring: Share your expertise in a particular subject.
• Social Media Management: Help businesses manage their online presence.
• Virtual Assistant: Provide administrative, technical, or creative assistance remotely.

Government Grants and Funding Programs

Ontario offers various grants and funding programs to support small businesses. Here are a few examples:

• Starter Company Plus: Provides training, mentoring, and potential funding for entrepreneurs aged 18-29².
• Northern Ontario Heritage Fund Corporation (NOHFC): Offers funding for businesses in Northern Ontario⁴.
• Ontario Automotive Modernization Program (O-AMP): Supports modernization projects for automotive businesses⁵.
• Grow Your Business Online Grant (CDAP): Helps small businesses adopt digital technologies⁶.

These grants often have specific eligibility criteria, so research carefully.

Wrapping up

Opening a business bank account in Ontario requires careful planning and preparation. By registering your business, gathering the necessary documents, and comparing your banking options, you can find the perfect fit for your needs. And remember, even with limited funds, there are opportunities to start a successful business in Ontario. Take advantage of available resources, explore grant options, and don't be afraid to start small.

Sources:

1. Ontario.ca: Register your business online
2. Starter Company Plus | ontario.ca
3. Ontario.ca: Ontario Business Registry
4. Funding Programs - Home | NOHFC
5. Ontario Automotive Modernization Program
6. Grow Your Business Online Grant
7. Cost and time required to register, change or search for a business name, corporation or not-for-profit | ontario.ca