Legally reviewed by Joseph Mayo, Principal Attorney (Ontario and New York).
Many founders who have run a limited liability company in the United States assume they can open the same structure north of the border. They cannot. There is no LLC in Ontario, and there is no LLC anywhere in Canada. Ontario recognizes a different set of business structures, and picking the right one affects your personal liability, how you are taxed, and how smoothly your business runs across the border. This guide explains why the LLC does not exist in Ontario, what you can set up instead, what each option costs in government fees, and how a United States LLC is treated if it operates in the province.
Quick Answer
No, you cannot form an LLC in Ontario. Canada does not offer the limited liability company as a business structure. Ontario recognizes sole proprietorships, partnerships, corporations, and co-operatives. Owners who want limited liability almost always incorporate a corporation, either provincially in Ontario or federally through Corporations Canada.
Can you form an LLC in Ontario?
No. The Government of Ontario lists four business structures for the province: the sole proprietorship, the partnership, the corporation, and the co-operative. The limited liability company does not appear on that list, and it is not available in any Canadian province or territory. If a service offers to register an "Ontario LLC" for you, what it is really doing is either incorporating a Canadian corporation or registering an existing foreign LLC to do business here. Neither one creates a new Ontario LLC, because that entity type does not exist under Canadian law.
This surprises a lot of American entrepreneurs, because in the United States the LLC is often the default choice for a small business. The concept was never adopted in Canada. Understanding the substitute structures, and how each one handles liability and tax, is the practical starting point.
Why doesn’t Ontario have an LLC?
The LLC is a creation of United States state law. Each American state has its own LLC statute, and the entity blends the limited liability of a corporation with the pass-through taxation of a partnership. Canada never enacted an equivalent statute. Instead, Canadian law kept a clearer line between unincorporated businesses, meaning sole proprietorships and partnerships, and incorporated ones, meaning corporations and co-operatives.
For most owners, the corporation fills the role the LLC would play. A corporation is a separate legal entity, so it keeps the business and its debts separate from the owner. The Government of Ontario puts it plainly: a corporation "keeps the business separate from the business owner," and limited liability is listed as one of its main advantages. What Canada does not offer is a single entity that gives you that liability shield and automatic pass-through tax treatment in the way a US LLC does.
What is the Canadian equivalent of an LLC?
The closest working equivalent is a corporation. If your goal in forming an LLC was to protect your personal assets from business debts, a Canadian corporation delivers that protection. You can incorporate two ways:
- Provincially, under the Ontario Business Corporations Act, through the Ontario Business Registry.
- Federally, under the Canada Business Corporations Act, through Corporations Canada, which lets you operate under one name across the country.
Each route has trade-offs on cost, name protection, and where you can carry on business. Our guide on how to incorporate a business in Ontario walks through the provincial process, and the ultimate guide to Ontario business structures compares every option side by side.
One point that often gets missed: an Ontario Limited Liability Partnership, or LLP, is not a general substitute for an LLC. Under the Ontario Partnerships Act, only specific regulated professions, such as law and accounting, can use an LLP, and the firm must carry on business under a registered name that includes "LLP." A typical business owner cannot use an LLP the way an American would use an LLC.
Ontario business structures compared
Here is how the available Ontario structures line up against the LLC an American founder might be used to.
| Structure | Separate legal entity? | Personal liability | How profits are taxed |
|---|---|---|---|
| Sole proprietorship | No | Owner is personally liable for all debts | Taxed on the owner’s personal return |
| General partnership | No | Partners are personally liable | Taxed on each partner’s personal return |
| Corporation (Ontario or federal) | Yes | Limited, in most cases | Corporate tax; owners taxed on wages or dividends |
| Co-operative | Yes | Members are generally not liable for the co-op’s debts | Taxed as a corporation |
| US LLC (for comparison) | Yes, in the US | Limited, in the US | Pass-through in the US; treated as a corporation by Canada |
Source: Government of Ontario, business ownership structures (ontario.ca), as of July 2026.
The takeaway is simple. If limited liability is the priority, the corporation is the structure that matches. Sole proprietorships and partnerships are cheaper and simpler, but they leave your personal assets exposed to business debts.
What does it cost to set up a business in Ontario?
Government filing fees are modest and public. The figures below are charged directly by the government and are current as of July 2026. They do not include lawyer or service-provider fees, which are separate.
| Filing | Government fee | Source |
|---|---|---|
| Ontario corporation (provincial, online) | $300 CAD | ServiceOntario |
| Federal corporation (online, basic) | $200 CAD | Corporations Canada |
| Business name registration (sole proprietorship or partnership) | $60 CAD | ServiceOntario |
| Extra-provincial licence (foreign corporation) | $330 CAD | ServiceOntario |
| Ontario limited partnership declaration | $210 CAD | ServiceOntario |
Source: ServiceOntario (ontario.ca) and Corporations Canada (ised-isde.canada.ca), fees as of July 2026. Government fees only.
Federal incorporation costs $200 for the basic online service, with an extra $100 if you want express processing in four hours. Ontario provincial incorporation is $300 online and is processed immediately. Registering a simple business name for a sole proprietorship is $60. These are Canadian-dollar fees. A US LLC filing is priced separately in US dollars, which the New York comparison below sets out.
Can a US LLC operate in Ontario?
Yes, but the path is registration, not formation. If you already have a United States LLC and you want it to carry on business in Ontario, you register the existing entity rather than create a new one. Ontario provides for this through extra-provincial and foreign-entity registration. The province’s own fee schedule lists an "Extra-Provincial Limited Liability Company" name registration at $60 under the Business Names Act, alongside an extra-provincial licence at $330 for a foreign corporation.
Which filing applies depends on how your LLC is characterized and what it will do in the province, and getting that classification right matters. Because a US LLC is treated as a corporation for Canadian tax purposes, which the next section explains, the registration and tax analysis can differ from what you expect. This is a point to confirm with counsel before you start operating, not after.
How is a US LLC taxed in Canada?
This is where carrying a US LLC across the border becomes a trap for the unwary. The United States generally treats an LLC as "fiscally transparent," meaning the LLC itself does not pay income tax and the profits flow through to the owners. Canada does not follow that treatment. The Canada Revenue Agency treats a US LLC as a corporation for Canadian tax purposes.
In the CRA’s own words, in an example of a US LLC carrying on business in Canada through a branch, the "US LLC is treated as a corporation for Canadian tax purposes but as fiscally transparent for US tax purposes." That LLC computes its taxable income earned in Canada, pays tax at corporate rates, and also faces a branch tax of 25 percent under Part XIV of the Income Tax Act, subject to treaty relief.
This mismatch is called a hybrid entity problem. Because one country sees a flow-through and the other sees a corporation, the timing and character of the income can line up badly, and a Canadian resident who owns a US LLC can end up unable to fully credit the US tax against Canadian tax. The result can be double taxation. The fix is almost never to use the LLC for Canadian operations. It is usually to hold Canadian business through a Canadian corporation and to get cross-border tax advice before money starts moving. Because tax outcomes turn on your specific facts, treat this section as general legal information, not tax advice for your situation.
LLC in New York versus Ontario: the cross-border contrast
For a firm that works on both sides of the border, the New York comparison makes the Ontario rule clear. In New York you can form an LLC. You file Articles of Organization with the New York Department of State for a $200 fee, and New York adds a publication requirement: you must publish notice in two newspapers and then file a Certificate of Publication for a $50 fee, plus the newspapers’ own charges.
So a founder in New York chooses between an LLC and a corporation, and our guide on LLC versus a corporation in New York walks through that choice. A founder in Ontario has no LLC option at all and chooses among a corporation, a partnership, or a sole proprietorship. If you are building on both sides of the border, you may well end up with a New York LLC and an Ontario corporation working together, which is exactly the kind of structure that needs coordinated cross-border planning.
Which structure should a cross-border business choose?
There is no single right answer, but a few practical points guide most decisions:
- If you want liability protection, incorporate. In Canada, the corporation is the vehicle that provides it.
- Ontario versus federal matters for directors. A federal corporation ordinarily needs at least 25 percent of its directors to be resident Canadians, and at least one resident Canadian director if it has fewer than four. Ontario removed its resident-Canadian director requirement for provincial corporations, so a US founder with no Canadian partners can often incorporate provincially in Ontario without a local director.
- Do not port a US LLC into Canada by default. The tax mismatch above usually makes that the wrong move.
- Plan the two sides together. If you operate in both countries, the Canadian entity and the US entity should be chosen as a set, not one at a time.
Before you incorporate, the Government of Ontario itself advises you to "consult a lawyer or professional advisor." That is sound guidance, especially for a cross-border business where an entity choice in one country changes the tax result in the other. Our cross-border business and corporate law team helps founders set up on both sides of the border, and our guide on how to start a business in both Canada and the US covers the wider picture.
Frequently asked questions
Does Canada have LLCs?
No. No Canadian province or territory offers the limited liability company as a business structure. The LLC is a United States entity created under state law. In Canada, owners who want limited liability incorporate a corporation instead, either provincially or federally.
Is an LLP the same as an LLC in Ontario?
No. Ontario has Limited Liability Partnerships, but under the Partnerships Act they are limited to certain regulated professions, such as law and accounting, and the firm must register a name that includes "LLP." An LLP is not a general-purpose limited liability vehicle the way a US LLC is, and most business owners cannot use one.
Can I register my US LLC to do business in Ontario?
Yes. You register the existing LLC as a foreign entity rather than forming a new one. Ontario’s fee schedule includes an extra-provincial Limited Liability Company name registration at $60 and an extra-provincial licence at $330 for a foreign corporation. Because a US LLC is treated as a corporation for Canadian tax, confirm the correct filing and the tax consequences with counsel first.
What is the best alternative to an LLC in Canada?
For most owners, a corporation. It is a separate legal entity that provides limited liability, which is usually the main reason someone wanted an LLC. You can incorporate provincially under the Ontario Business Corporations Act or federally under the Canada Business Corporations Act.
How much does it cost to incorporate in Ontario?
As of July 2026, provincial incorporation through the Ontario Business Registry is $300 online. Federal incorporation through Corporations Canada is $200 for the basic online service, or $300 with express four-hour processing. These are government fees only and do not include legal fees.
Will my US LLC be double taxed in Canada?
It can be. Canada treats a US LLC as a corporation while the United States treats it as fiscally transparent, and that mismatch can prevent a Canadian resident from fully crediting the US tax, which leads to double taxation. This is why cross-border advisors usually steer Canadian operations into a Canadian corporation rather than a US LLC.
Can a non-resident incorporate a corporation in Ontario?
Generally yes. Ontario no longer requires resident-Canadian directors for corporations formed under its Business Corporations Act, so a non-resident can incorporate provincially without a Canadian director. A federal corporation, by contrast, ordinarily requires at least 25 percent resident-Canadian directors. Confirm current requirements before you file.
Conclusion
The short answer holds throughout: you cannot form an LLC in Ontario, because Canada does not have that structure. What you can do is choose among the structures Ontario actually offers, and for most owners who wanted an LLC, that means incorporating a corporation. The bigger risk is not the missing LLC label. It is assuming a US LLC will behave the same way in Canada, when the CRA treats it as a corporation and the tax can turn against you. A little planning up front, on both sides of the border, avoids an expensive correction later.
How Mayo Law Can Help
Mayo Law is a cross-border firm focused on United States and Canada business and immigration matters, with offices in Toronto and New York. Principal attorney Joseph Mayo is licensed in both Ontario and New York, which lets the firm advise on the Canadian entity and the US entity together rather than in isolation. If you are deciding how to structure a business that touches both countries, or you are wondering what to do with a US LLC that now has Canadian activity, we can help you choose and set up the right structure. Learn more about our cross-border business and corporate law services, or contact us to talk through your situation.
Disclaimer
This article is for general information only and is not legal or tax advice. Reading it does not create a lawyer-client relationship. Laws, government fees, and filing requirements change, and how they apply depends on your specific facts. For advice about your situation, speak with a qualified lawyer or tax advisor. Legal services are provided through Mayo Law PC in Ontario and Joseph Mayo PLLC in New York.
