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Business Terminology

The following are some words commonly used in the industry:

Business Licence is required by particular businesses in order to operate.  This is in addition to the business name registration.  For example, "Joe's Garage" is required to register its business name with the Ontario Companies and Personal Property Security Branch, Ontario Ministry of Government Services, AND obtain a licence in order to operate as a garage.  To determine if your business will be affected by local regulations, licences, municipal business tax or zoning requirements contact the clerk of the city, town, village or rural municipality where your business will be located.  These numbers can be found in the Blue Pages of the Telephone Directory under the appropriate heading (e.g. Licences and Permits).

Business Identification Number (BIN) is the number assigned by the Companies and Personal Property Security Branch, Ontario Business Information System (ONBIS) to your business name registration.  This is not your federal Business Number (BN) issued by the Canada Revenue Agency

Business Name Registration:  Refers to a registration under the Business Names Act.  It expires after 5 years and must be renewed.  The Companies and Personal Property Security Branch, Ontario Ministry of Government Services (MGS) does not send reminder notices.  A registry of business names of sole proprietorships, general partnerships, Ontario limited liability partnerships, extra-provincial limited liability companies and business names registered for a corporation operating with a name other than its corporate name is maintained by the Branch.  A business name registration should not be confused with incorporation (see corporation) or a business licence (see business licence).

Business Number (BN) is a federal numbering system that replaces the multiple numbers businesses require to deal with the government.  The business number includes Harmonized Sales Tax (HST), import/export, payroll deductions and/or corporate income tax.

Business Plan: The written document that details a proposed or existing venture. It seeks to capture the vision, current status, expected needs, defined markets, and projected results of the business. A business plan "tells the entrepreneur's story" by describing the purpose, basis, reason and future of the venture.

Cash Flow Forecast: An estimate of when and how much money will be received and paid out of a business. It usually records cash flow on a month-by-month basis for a period of two years.

Collateral is a security pledged for the repayment of a loan.

Corporation is an incorporated entity with its own rights and responsibilities as a distinct person under the law.  A corporation is owned by the shareholders and managed by directors chosen by the shareholders.  The owners of a corporation are not personally responsible for the debts of the corporation.  The corporation is responsible for its debts.  A corporation should not be confused with an unincorporated business name registered under the Business Names Act.

A Business Corporation is a business entity incorporated under the Ontario Business Corporations Act. The purpose of a business corporation is to make a profit for its owners.  A business corporation is distinguished by the use of the following legal elements within the corporate name: "Limited", "Limitée", "Incorporated", "Incorporée" or "Corporation" or the corresponding abbreviations "Ltd.", "Ltée", "Inc." or "Corp."

Entrepreneur: A person who is willing to assume the responsibility, risk and rewards of starting and operating a business.

Equity: the difference between the market value of a property and the claims held against it.

Export: commodities (goods or services) sold to a foreign country.

Fiscal Year: A company's business year, usually a 12-month accounting period, this does not necessarily correspond to the calendar year.

General Partnership: refers to an unincorporated business with 2 or more owners.  The general partnership may consist of individuals, corporations, or other unincorporated businesses.  This is not the same as a limited partnership.  The business name of a general partnership is registered by filing a Registration Form 1 under the Business Names Act.

Grant: Any monetary aid.

Import: commodities (goods or services) bought from a foreign country.

Incorporation: The business is a separate legal “person” from the owner. (see Corporation)

Lease: A contract granting use or occupation of property during a specified time for a specified payment.

Limited Partnership: refers to an unincorporated business with at least one general partner and one or more limited partners.  General partners have unlimited liability and limited partners have limited liability up to the amount of their investment.  A limited partnership is created by filing a Declaration Form 3 under the Limited Partnerships Act.

Limited Liability Partnership (LLP) is a partnership, other than a Limited Partnership, that is formed or is continued as a Limited Liability Partnership in Ontario under Section 44.1 of the Partnerships Act.  Currently in Ontario only chartered accountants, certified general accountants or lawyers can form LLPs.

Loan: The temporary provision of money (usually at interest)

Marketing: The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Market Research: The gathering of information by a business about the preferences, purchasing powers, esp. of consumers, especially before putting a product or service on the market.

Master Business Licence (MBL) is issued when a business name is registered under the Business Names Act.  The Master Business Licence can be used as proof of business name registration at financial institutions and to facilitate any other business-related registration with the Ontario government.

Not-For-Profit Corporation is an Ontario corporation incorporated under the Ontario Corporations Act. Not-for-profit corporations, such as social clubs or cultural and sporting organizations, do not operate for the purpose of gain for its members and any profits must be used to promote its objects. It may have "Incorporated", "Inc.", "Corporation" or "Corp." as a legal element within the name, but it is not required.

A corporation may operate under a name other than its legal corporate name by filing a Registration Form 2 under the Business Names Act.  The operating name can not have the legal elements of "Limited", "Limitée", "Incorporated", "Incorporée", "Corporation", "Ltd.", "Ltée", "Inc." or "Corp." within the name. 

Partnership: A contract between two or more persons who agree to pool talent and money and share profits or losses.

Silent Partner: A business partner who provides capital but does not actively participate in the management of operations. For various reasons, sometimes such individuals do not even want their identities associated with the business.

Sole Proprietorship: refers to an unincorporated business with one (sole) owner.  The owner must be an individual.  It is not a corporation.  The business name of a sole proprietorship is registered by filing a Registration Form 1 under the Business Names Act.  A sole proprietorship is not required to be registered if the business is carried on under the owners name (e.g. Jane Smith).

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