Does registering a business name in Ontario affect how I'm taxed?

Registering a business name (a "trade name") in Ontario under the Business Names Act does not change your legal structure or how you are taxed. You remain a sole proprietor, and your business income continues to be reported on your personal T1 return through Form T2125. A registered trade name is simply a name you use to operate — it does not create a separate legal entity or a separate tax filing obligation.

Only incorporating your business (which creates a separate legal corporation) changes the tax structure by introducing a separate corporate tax return and potentially access to the lower small business corporate rate.

However, there can be indirect tax implications to operating under a registered name: you may appear more clearly as a business operator to the CRA, and crossing the HST threshold of $30,000 in taxable revenues will trigger HST registration regardless of whether you have a registered name. If you are registering a name because your business is growing, it is a good time to also review your HST and income-tax obligations.