1. Choosing the Right Structure for Your Business
Before diving into the specifics, it’s crucial to decide on the structure of your business. The most common types are sole proprietorships, partnerships, and corporations. Each has its own benefits and legal implications, so choose the one that best aligns with your business goals and needs.
2. Federal Incorporation
Incorporating your business federally provides certain benefits, such as enhanced credibility, limited liability, and the ability to operate across Canada. Here’s how to do it:
- Name Your Corporation: Decide on a unique name or opt for a numbered corporation.
- Articles of Incorporation: Prepare and file your Articles of Incorporation with Corporations Canada. This document outlines your business structure, share structure, and other legal elements.
- By-Laws and Organizational Resolutions: Develop internal by-laws and pass organizational resolutions.
- Federal Filing: Complete the incorporation process by filing online or through mail with Corporations Canada.
3. Incorporation in Ontario and British Columbia
Incorporating provincially in Ontario or British Columbia has its own set of procedures:
- Name Reservation: Reserve your business name through Ontario Business Registry.
- Articles of Incorporation: File your Articles of Incorporation online through
Ontario Business Registry.
- File Form 1 Initial Return online through
Ontario Business Registry.
- Name Approval Request: Submit a Name Approval Request to the BC Registry Services.
- Incorporation Application: File the incorporation application with the necessary details about your business.
- Post-Incorporation Setup: Prepare by-laws and organizational documents as required by BC law.
4. Canada Revenue Agency (CRA) Business Number
Every business needs a Business Number (BN) from the CRA. This number is your company’s identifier for tax purposes and is required for various accounts. You can apply for a BN online through the CRA’s Business Registration Online (BRO) service online or by mail.
5. Registering for a GST/HST Account
If your business is expected to earn more than $30,000 in annual taxable sales, you must register for a Goods and Services Tax (GST)/Harmonized Sales Tax (HST) account. This can be done through the BRO service when applying for your Business Number.
6. Setting Up a Payroll Account
If you’re planning to have employees, you’ll need a payroll account to remit deductions like CPP (Canada Pension Plan) contributions, EI (Employment Insurance) premiums, and income tax. This can also be set up through the BRO service.
Starting a business in Canada involves several legal and administrative steps. By following this guide, you can ensure that your business complies with federal and provincial regulations and is set up efficiently.
Remember, consulting with legal and accounting professionals is always recommended to navigate the complexities of business incorporation and taxation.
Reach out to our Corporate Services Team