A Trade Name is a business name registration under a corporation. Since the the owner of a trade name is a corporation, the trade name technically gets all the benefits of a corporation unlike a sole proprietorship. A corporation may register a trade name to operate its entire business or a certain department under a different operating name other than its legal name. These trade names are also commonly known as Operating Name or Doing Business As (DBA), or a Fictitious Name, or an Assumed Name.
Sole Proprietorship in Ontario
The previous name of this product was Ontario Master Business Licence (MBL). It is also known as business name registration in Ontario. A sole proprietorship in Ontraio must be owned by a single person and not a corporation. When this type of business entity is owned by a corporation, in Ontraio, it’s called Trade Name Registration
Sole Proprietorship in Other Province
In most provinces, this is also known as business name registration. In Alberta, a sole proprietorship and a trade name registration is done in the same form and hence, sometimes a sole proprietorship is called trade name registration in Alberta. To register a sole proprietorship, you must have a address in the designated province.
What are the advantages of a sole proprietorship:
1. they’re easy and inexpensive to set up
2. you’ll have direct control of decision-making
3. minimal working capital usually required
4. there are some tax advantages, such as expenses and losses offsetting your income
5. all profits go to you, the business owner
What are the disadvantages of a sole proprietorship:
1. no corporation to assume liability risk so any claims may have to be paid from your personal assets
2. as the business owner, you’re responsible for all debts
3. inability to sell equity in the business makes it difficult to raise capital
4. harder to sell or transfer your business to others when it’s solely dependent on your involvement