How can I register my business in Canada?
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06 May 2024
In Canada, registering a sole proprietorship is a relatively simple procedure, while each province or territory may have different requirements. Here's what is usually needed:
How can I register my business in Canada?
Have you been thinking about setting up your business for quite some time, but are a bit daunted with the business registration process in Canada? Finding how many types of business structures are there in Canada can certainly help you with choosing the right accounting services in a cost-saving manner. The process and documentation for every structure you’ve heard is quite different – sole proprietorship, partnership, and corporation. Many entrepreneurs can struggle with making a decision. To help you get started, we decided to explain business registration and legalese of every structure – so you can focus on your core operations! Check out the blog below to make your next big business decision with ease!Different business structures in Canada
In Canada, you can own a sole proprietorship, open the business in partnership, or become a corporation. Are you unable to make a decision – whether to opt for a corporation or stay lowkey as a sole proprietorship? Check out our previous blog on choosing between sole proprietorship vs partnership.What is a sole proprietorship in Canada? How can I register one?
Establishing a sole proprietorship is one of the simplest company structures. Here, one person owns and operates the company. This implies that although you have total authority over the company, you are also personally responsible for all of its liabilities. Pros: Easy and inexpensive to set up, all profits belong to you, and you make all the decisions. Disadvantages: You are personally responsible for all the debts of your business. Besides, the income earned from this business will be taxed as per the personal tax bracket (which can be costly).Getting a sole proprietorship registered
In Canada, registering a sole proprietorship is a relatively simple procedure, while each province or territory may have different requirements. Here's what is usually needed:
- Business Name: You may select a business name or use your own legal name for business purposes. If you choose a different name, you should register it with your provincial or territorial business registry.
- Federal Business Number (BN): Apply for a BN with the Canada Revenue Agency (CRA). This is a unique identifier for your business for tax purposes.
- Permits and Licenses: Finally, you’ll need various other licenses and permits from different authorities (federal, provincial, or municipal), depending upon your type of operations.
Partnership: What is it and how do I register it in Canada?
It’s what exactly the name suggests: two people coming together to run a business. In Canada, you have two ways to run a business under a partnership: General, and Limited. Here’s an overview:-- General Partnership: The simplest form, with all partners sharing responsibility for management, profits, losses, and unlimited liability for business debts.
- Limited Partnership: More complex, involving general partners with full liability and limited partners with limited liability based on their investment. Limited partners cannot participate in daily management.
- Partnership Agreement: Highly recommended, even for a general partnership. This legal document outlines partner roles, responsibilities, profit sharing, and dispute resolution mechanisms.
- Business Name Registration: In case your business name is not the legal name combined of all the partners, then you’ll need to register this name with the territorial or provincial business registry.
- Federal Business Number (BN): Apply for a BN with the Canada Revenue Agency (CRA) for tax purposes. This unique identifier simplifies tax filing for the partnership.
- Permits and Licenses: As per the operations of your business, you may need additional permits, licenses or both from provincial, municipal or federal authorities.
Corporation: What is it and how do I register it in Canada?
A corporation is a separate legal entity from its owners (shareholders). It offers limited liability protection for the owners and a more formal structure compared to sole proprietorships and partnerships. Registration Options: There are two main options for incorporating your business in Canada:- Federal Corporation: Registered with Innovation, Science, and Economic Development Canada (ISED). This allows you to operate anywhere in Canada.
- Provincial Corporation: Registered with your provincial or territorial government. This limits your operation to that specific province or territory, but it might have slightly lower fees.
- Firstly, choosing a name. Once you are content with a name for the business, get it checked with NUANS (a computerized system) from ISED to confirm the uniqueness of your name.
- Next, prepare the Articles of Incorporation, a document that mentions the purpose of the corporation, the structure of shares, and all the initial directions and shareholders.
- File Incorporation Documents: Submit the articles of incorporation and pay the required filing fee to the chosen federal or provincial authority.
- Obtain a Corporate Records Book: Maintain a record book with key corporate documents like articles of incorporation, bylaws, and shareholder meeting minutes.
- Federal Business Number (BN): Apply for a BN with the CRA for tax purposes.
- Innovation, Science, and Economic Development Canada (ISED): https://ised-isde.canada.ca/site/ised/en
- Registering a corporation: https://www.canada.ca/en/services/business/start/register-with-gov/register-corp.html
