Register your business in Canada is a great place to start your business. If you’ve decided to do so, you’ve made a great decision.
While setting up a business in Canada seems rewarding, its registration is equally challenging. However, with professional assistance and strategic planning, you can make this step easier for yourself.
While the rules/laws may differ across provinces, it is recommended to conduct your research beforehand. This is a general step-by-step guide for you to understand how can you complete your small business registration in Ontario, Canada. Keep reading to grasp the concept.
Select Your Business Structure:
First and foremost, it is important to choose the structure register your business will be operating on. Generally, there are three most common business structures in Canada and each has its unique tax laws. You can get the details of it here.
- Sole proprietorship:
This is the most common business set-up new business owners prefer. You are your own boss in this business set-up. Simply, you are responsible for all the debt, and liabilities, in short all the financial decisions and requirements. Your business’s financial details are supposed to be listed in a separate section of the personal income tax form.
- Partnership:
In this type of business structure, you partner up with someone. It can be one or more people. Based on their individual share, their profits, losses, and taxes are filed.
All of this is carried out based on a contract/agreement that each partner agrees to before entering into a business together.
- Corporation:
This is the office-employee setting. You are the owner of a corporate organization and this is the most complex business set-up among all three. Learn more about it here.
After thorough analysis and reflection on your goals and objectives, choose the business structure you are likely to operate.
Now it’s time to move forward to the next step.
Think of your business name and proceed towards its registration:
The name of your business would be its identity. Hence, it is important to think of a good name that represents your goals and dedication to register your business.
You can also operate register your business with your name as a sole proprietor. However, if you add another name to it, you’ll have to register it.
For instance, if your name is Jacob and you want register your business name to be Jacob Enterprises, you’ll have to register this name.
Apply For Necessary Permits and Licenses:
For successful registration of business in Ontario, it is important for you to get the necessary licenses and permits from the Canada Revenue Agency (CRA). It allows you to legally operate your business in the state of Canada.
There are a total of 5 kinds of business licenses you’ll come across while register your business.
- Municipal license: if register your business deals with something that might disturb the residents of a specific sector/community, you need to get this license as a necessary permit.
- Environmental and zoning permits: just like the municipal permit, if your business can harm the environment in any way, you’ll need to get this license. You’ll be awarded this license only if your business contributes to any sort of well-being of the community.
- Federal registration: this is a state-level registration. You need to register your business with the Canada Revenue Agency (CRA) to get this permit. You’ll be given a business number if your corporation has employees and runs on a large scale.
- Provincial registration: in order to get this permit/license you need to register your business with the provincial government. All of your GST/HST taxes are supposed to be liable there.
Create articles of incorporation:
If you’re incorporating a small business, basic incorporation will be all you need. It includes:
- Pre-determined articles of incorporation (you can make changes to it later, as per your requirement)
- One or two classes of shares
- A maximum of 10 directors
- A corporate name
You can also choose to customize your articles of incorporation. Most merchants who choose to customize will specify the following:
- Your corporate name
- Your share structure and any restrictions on share transfers
- Your corporation’s number of directors
- Any restrictions you might want to set for your business or business activities
- Any other provisions
Get a registered your business address and a business bank account:
You are almost near completing business name registration in Ontario, Canada. For this step, you’ll need to choose a specific location for your office setup. All of your professional and business-related documents will be delivered there.
It is important that your office has a specific board of directors. If you have them, mention their first and last name with their residency being a Canadian as well during your business registration process.
Then, proceed towards opening a separate business bank account where you are able to keep international currencies.
Pay The Registration Fee:
Finally, it’s time to pay your registration fee. Generally, business registration in Ontario costs around $360 in person and $300 online via email. You can directly view it here.
KEY TAKEAWAYS:
While setting up a business in Canada might seem like an exciting opportunity, dealing attentively with the entire process is crucial.
Whether you choose a sole proprietorship, partnership, or corporation, it’s essential to obtain the necessary licenses and permits to operate smoothly and in compliance with the law.
If you’re a resident or non-resident looking to start a business in Canada but aren’t sure where to begin, we are here to help. Book your first consultation with Numeracy Accounting Solutions, and we’ll guide you through the process.
For further reading, explore our blog on How to Choose the Right Business Consultant Firm in Mississauga for Your Needs or learn about the Benefits of Bookkeeping for Small Businesses