How to register a business in Canada -What you need to know

Last Updated on July 1, 2024 by admin

Do you want to start a business in Canada and you are aware that each Canadian province and territory has its own rules and business registration fees ?Registering your business could include registering your business name, subscribing to a GST/HST number, or incorporating your business.

This article details how to register your business in Canada. It specifically explains the steps and process of Registering business with the government. You also learn the steps to consider before operating a business in Canada.

This post will also explain Business Registration Online, Steps to start a business and move to Canada as a foreign national. It’s ideal you register your business with the Canadian government, because it will get you the necessary approval to run and operate a business with every legal requirement

Also Canada has a skilled workforce, You can also access government grants and tax credits. If you are in Canada or outside and looking to start a small business, this guide will walk you through every necessary detail and procedure to get started. You may have to register with the government before you start operating your business.

Also read:Best Payday loans lenders in Canada

What you need to know before you register your business in Canada?

Before registering your business in Canada, there are several key factors you need to consider:

1. Business Structure:

   • Determine the legal structure that best suits your needs: sole proprietorship, partnership, corporation, or cooperative. Each has different legal and tax implications.
   • Consider factors like liability, ownership, management, and taxation when choosing your structure.

2. Business Name:

   • Choose a unique and memorable name that reflects your business activities.
   • Check if the name is available and complies with naming regulations in your province or territory.
   • You can use the Canadian corporate names and trademarks database (Nuans) to search for available names.

3. Business Registration:

   • Register your business with the appropriate federal, provincial, or territorial government agencies.
   • You’ll need to provide information like your business name, address, type of business, and ownership details.
   • You may also need to obtain a business number (BN) for tax purposes.

4. Licenses and Permits:

   • Research and obtain any necessary licenses and permits required to operate your business legally.
   • These may include federal, provincial, and municipal licenses, depending on your industry and location.

5. Taxes:

   • Understand your tax obligations as a business owner in Canada.
   • Register for GST/HST if your revenue exceeds the threshold.
   • Consider hiring an accountant to help you with tax planning and compliance.

6. Financing:

   • Determine how you will finance your business. Options include personal savings, loans, grants, and equity investments.
   • Research government programs and incentives that may be available to support your business.

7. Insurance:

   • Obtain appropriate insurance coverage to protect your business from risks such as liability, property damage, and business interruption.

8. Employees:

   • If you plan to hire employees, understand your responsibilities as an employer, including payroll taxes, benefits, and workplace safety regulations.

9. Intellectual Property:

   • If your business has unique products or services, consider protecting your intellectual property through trademarks, patents, or copyrights.

10. Additional Considerations:

• Develop a business plan outlining your goals, strategies, and financial projections.
• Research your target market and competition.
• Set up a business bank account to manage your finances.

How to Starting a business Canada

Starting a business in Canada involves several steps, each requiring careful planning and consideration:

1. Plan Your Business:

   • Assess your readiness: Evaluate your skills, experience, and resources.
   • Choose a business structure: Determine if you’ll be a sole proprietor, partnership, corporation, or cooperative.
   • Conduct market research: Identify your target market, competitors, and potential challenges.
   • Develop a business plan: Outline your goals, strategies, and financial projections.

2. Choose a Business Name:

   • Brainstorm a unique name: Ensure it’s relevant to your business and easy to remember.
   • Check availability: Use the Canadian corporate names and trademarks database (Nuans) to see if your chosen name is available.
   • Register your business name: Register it provincially or federally, depending on your business structure and goals.

3. Register Your Business:

   • Determine your registration requirements: This varies depending on your business structure and province/territory.
   • Register with the appropriate authorities: Register with the federal government, your province or territory, or both.
   • Obtain a business number: This is required for tax purposes and to access government services.

4. Get Licenses and Permits:

   • Research and identify required licenses: Depending on your industry and location, you may need federal, provincial, and municipal licenses and permits.
   • Apply for licenses and permits: Follow the application procedures and submit any required documentation.

5. Finance Your Business:

   • Explore financing options: Consider personal savings, loans, grants, or investments.
   • Create a financial plan: Outline your startup costs, revenue projections, and cash flow.

6. Obtain Insurance:

   • Assess your risks: Identify potential risks associated with your business.
   • Choose appropriate insurance: Get liability insurance, property insurance, and any other coverage required for your industry.

7. Manage Taxes:

   • Register for GST/HST: If your revenue exceeds the threshold, you’ll need to collect and remit the Goods and Services Tax/Harmonized Sales Tax.
   • Understand your tax obligations: Research federal and provincial/territorial taxes that apply to your business.
   • Hire an accountant (optional): Consider getting professional help for tax planning and filing.

8. Hire Employees (if applicable):

   • Understand employer obligations: Familiarize yourself with payroll taxes, employment standards, and workplace safety regulations.
   • Create job descriptions and contracts: Clearly define roles and responsibilities for your employees.

9. Market Your Business:

   • Develop a marketing strategy: Identify your target audience and create a plan to reach them.
   • Utilize various marketing channels: Consider online marketing, social media, advertising, and networking.

10. Stay Informed and Adapt:

• Keep up with industry trends: Stay informed about changes in your industry and adapt your business strategies accordingly.
• Seek ongoing support: Utilize resources like business organizations, mentors, and government programs to help your business thrive.

Read: Best Short Term Loans lender in Canada

Canada Business Registration Online

Canada Business Registration Online (BRO) is an online platform provided by the Canada Revenue Agency (CRA) that allows you to:

1. Obtain a Business Number (BN): A BN is a nine-digit number used to identify your business for tax purposes and other government programs.
2. Register for Various Program Accounts: You can use BRO to register for:
   • GST/HST program account: To collect and remit the Goods and Services Tax/Harmonized Sales Tax.
   • Payroll deductions program account: To deduct income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums from your employees’ pay.
   • Corporation income tax program account: For corporations to file income tax returns.
   • Other program accounts: For charities, information returns, luxury tax, and underused housing tax.

Eligibility:

You can use BRO if you are:

• A business owner
• A third-party requester acting on behalf of a business
• A representative with a RepID (a unique identifier for tax professionals)
• An individual employing a caregiver, babysitter, or domestic worker
• An individual with a Social Insurance Number (SIN) that starts with a 9

How to Use BRO:

1. Visit the BRO website: Go to the CRA website and access the Business Registration Online (BRO) service.
2. Create an account or log in: If you don’t have an account, you’ll need to create one. Otherwise, log in with your existing credentials.
3. Follow the instructions: Provide the required information about your business, such as legal name, address, type of business, and ownership details.
4. Submit your application: Once you’ve completed the information, submit your application through BRO.
5. Receive your BN and program accounts: You’ll receive your BN and any registered program accounts by mail or email.

Restrictions you need to know on Canada Business Registration Online

While Canada Business Registration Online (BRO) is a convenient tool for registering your business and program accounts, there are certain restrictions you should be aware of:

1. Incorporation Restrictions:

   • You cannot use BRO to register a business number for a business that was incorporated federally with Innovation, Science and Economic Development Canada (ISED) or provincially in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, or Saskatchewan.

2. Limited Company Registration:

   • BRO is not designed for registering a limited company. You must register your limited company with the appropriate provincial or territorial government. Once incorporated, you can use BRO to register for program accounts like GST/HST and payroll deductions.

3. Import/Export Program Accounts (As of May 13, 2024):

   • The CRA no longer registers or maintains import and export program accounts through BRO. These services are now provided by the Canada Border Services Agency (CBSA) through their Assessment and Revenue Management (CARM) portal. However, you’ll still need a business number from the CRA (obtained through BRO) before contacting the CBSA.

4. Sole Proprietorships and Partnerships:

   • While you can register sole proprietorships and partnerships using BRO, it’s important to note that this does not constitute a legal business registration. You may still need to register your business name provincially or territorially depending on your specific circumstances and location.

5. Additional Restrictions:

   • Certain types of businesses, such as financial institutions and insurance companies, may have additional registration requirements beyond what BRO offers.
   • If you are not a Canadian resident or have a complex business structure, you might need to consult a legal or tax professional for guidance on registration.

You cannot use BRO to register a business number for a business that was incorporated:

federally with Innovation, Science and Economic Development Canada
provincially in:
Alberta
British Columbia
Manitoba
New Brunswick
Nova Scotia
Ontario
Prince Edward Island
Saskatchewan

How do I register a GST/HST number?

In Canada, you can register for a GST/HST (Goods and Services Tax/Harmonized Sales Tax) number through the following methods:

1. Online Registration:

   • Business Registration Online (BRO): The simplest way is through the Canada Revenue Agency’s (CRA) Business Registration Online (BRO) service. You can register for a GST/HST account simultaneously with your business number (BN) or separately if you already have a BN.
   • Represent a Client (RAC): Tax preparers and representatives can use this online service to register their clients for a GST/HST account.

2. By Mail:

   • Form RC1, Request for a Business Number and Certain Program Accounts: You can complete and mail this form to the CRA. This option is suitable for businesses not eligible to use BRO.

3. By Phone:

   • CRA Business Enquiries line: You can call the CRA Business Enquiries line to register for a GST/HST account.

When to Register:

• Mandatory Registration: If your business’s annual worldwide taxable revenue (before expenses) exceeds $30,000 CAD, you must register for GST/HST.
• Voluntary Registration: Even if your revenue is below the threshold, you can choose to register voluntarily. This allows you to claim input tax credits on GST/HST you pay on business expenses.

Information Required:

To register, you’ll need to provide:

• Business information: Legal name, address, type of business, and start date.
• Owner information: Social Insurance Number (SIN) or Individual Tax Number (ITN) for sole proprietors, partner information for partnerships, and director information for corporations.
• Banking information: Details of your business bank account for direct deposit of any GST/HST refunds.

After Registration:

Once you’ve registered, you’ll receive a GST/HST account number and information on how to file your GST/HST returns. You’ll need to charge and collect GST/HST on your sales, file returns, and remit the tax collected to the CRA.

How to start a business Canada without registration

While technically possible to operate a very small business in Canada without registering, it is not advisable and comes with several limitations and risks:

What you can do without registration:

• Sole Proprietorship under your own name: If you are operating as a sole proprietor and using your own legal name for your business, you may not need to register provincially. However, you’ll still need a business number (BN) from the CRA for tax purposes if your income exceeds $30,000 annually.
• Freelancing or consulting: If you offer services under your own name, you might not need formal registration initially, but you’ll still need to report income and pay taxes.

Limitations and risks of operating without registration:

• Limited growth potential: Without a registered business, you might face difficulties securing financing, attracting investors, or expanding your business.
• Personal liability: As a sole proprietor, you are personally liable for all debts and liabilities of your business. This means your personal assets are at risk if your business faces legal or financial challenges.
• Loss of credibility: Not having a registered business can make it harder to gain trust from customers, suppliers, and partners.
• Tax implications: Even without registering, you’re still responsible for paying taxes on your business income. Failure to do so can result in penalties and interest charges.
• Legal issues: Depending on your location and industry, operating without proper registration or licenses could lead to legal repercussions.

Recommendation:

While it’s possible to start small without registration, it’s strongly recommended to register your business as soon as possible. Registering provides legal protection, establishes credibility, and opens doors to growth opportunities. The specific registration process depends on your business structure and location, so it’s best to consult with a professional advisor for guidance.

How much does it cost to register a company in Canada?

The cost to register a company in Canada varies depending on several factors, including:

1. Business Structure:

   • Federal Incorporation: Filing articles of incorporation with the federal government costs CAD 200 if done online and CAD 250 for paper filing.
   • Provincial/Territorial Incorporation: Fees vary by province/territory, ranging from CAD 200 to CAD 350 or more. Some jurisdictions also charge a separate name approval fee.

2. Name Search (Nuans):

   • A Nuans name search is mandatory for federal incorporation and may be required for provincial registration. The cost is usually around CAD 30.

3. Additional Services (Optional):

   • Some businesses may choose to use a third-party service to assist with the registration process, which can incur additional fees.
   • Obtaining legal advice or professional services for drafting documents can also add to the cost.

4. Other Costs:

   • Registering for GST/HST, payroll deductions, or other program accounts may have additional fees.
   • Depending on your business activities, you might need to obtain licenses and permits, which also come with their own costs.

Here’s an estimated breakdown of the basic costs:

• Federal Incorporation:
  • Online filing: CAD 200
  • Paper filing: CAD 250
  • Nuans name search: CAD 30
• Provincial/Territorial Incorporation:
  • Varies by jurisdiction (CAD 200-350+)
  • Name approval fee (if applicable)

It’s important to note that these are just the basic registration fees. The actual cost of registering a company in Canada can be higher depending on your specific needs and chosen services.

What are the types of business structures in Canada?

In Canada, there are four main types of business structures:

1. Sole Proprietorship:

   • Simplest and most common form of business.
   • Owned and operated by one person.
   • Owner is personally liable for all debts and obligations of the business.
   • Easy to set up and requires minimal paperwork.

2. Partnership:

   • Two or more people share ownership and responsibility for the business.
   • Partners are jointly and severally liable for the business’s debts and obligations.
   • Profits and losses are shared among partners based on the partnership agreement.
   • Can be general partnerships or limited partnerships (with limited liability for some partners).

3. Corporation:

   • A separate legal entity from its owners (shareholders).
   • Shareholders have limited liability for the company’s debts and obligations.
   • More complex to set up and requires ongoing compliance with regulations.
   • Offers tax advantages and better access to financing.

4. Cooperative:

   • Owned and controlled by its members, who use its services and share in its profits.
   • Members have limited liability for the cooperative’s debts and obligations.
   • Democratic governance structure, with each member having one vote.
   • Focuses on meeting the needs of its members rather than maximizing profits.

Choosing the right business structure depends on various factors, including:

• Liability: How much personal risk are you willing to take on?
• Taxation: What are the tax implications of each structure?
• Ownership and control: Who will own and manage the business?
• Financing: What are your funding needs and options?
• Complexity and costs: How much time and resources are you willing to invest in setup and maintenance?

Can I register a business in Canada as a foreigner?

Yes, you can register a business in Canada as a foreigner. There are no restrictions on foreign ownership for most types of businesses, and the process for registering a business is generally the same for both Canadians and non-residents.

However, there are a few things you need to consider as a foreigner:

1. Physical Presence:

   • In some jurisdictions, you may be required to have at least one director of the company who is a Canadian citizen or permanent resident.
   • If you plan to operate the business in Canada, you might need a work permit or business visa.

2. Business Number (BN):

   • You’ll still need to obtain a Business Number (BN) from the Canada Revenue Agency (CRA) for tax purposes.
   • You can apply for a BN online through the Business Registration Online (BRO) service.

3. Extra-Provincial Registration:

   • If your business is incorporated in another country and you want to operate in Canada, you might need to register as an extra-provincial corporation in each province or territory where you do business.

4. Taxes and Reporting:

   • You’ll be subject to Canadian taxes on your business income earned in Canada.
   • You’ll need to file Canadian tax returns and comply with all relevant tax laws and regulations.

5. Professional Advice:

   • It’s highly recommended to consult with a lawyer or accountant familiar with Canadian business laws and regulations to ensure you meet all requirements and understand the tax implications.

In some jurisdictions, you will be required to have a company director who is either a Canadian citizen or a permanent resident in order to register your business. The Canadian director will be required to assume liability for your business. registering a federally incorporated business in Ontario requires that 25% of your directors.

Ontario, Alberta, and British Columbia don’t require a resident director for provincial incorporation, but you will require an address within the provinces you’re trying to incorporate in

How to Move to Canada as a foreign national for the purpose of business,

Moving to Canada as a foreign national for business purposes can be achieved through several pathways, depending on your specific circumstances and goals:

1. Start-up Visa Program: This program targets innovative entrepreneurs who want to establish a business in Canada. It requires support from a designated Canadian venture capital fund, angel investor group, or business incubator. You must also demonstrate language proficiency and have sufficient funds to support yourself and your family.

2. Self-Employed Persons Program: This program is for individuals with experience in cultural or athletic activities and farm management. You need to demonstrate relevant experience and the intention and ability to become self-employed in Canada.

3. Intra-Company Transfer Work Permit: If you are an employee of a multinational company with a branch or subsidiary in Canada, you may be eligible for an Intra-Company Transfer Work Permit. This allows you to work for the Canadian branch of your company.

4. Owner-Operator LMIA Program: This program allows foreign entrepreneurs to purchase or establish a business in Canada and obtain a work permit. It requires a positive Labour Market Impact Assessment (LMIA) demonstrating that your business will create or maintain employment for Canadians.

5. Provincial Nominee Programs (PNPs): Many provinces and territories have their own business immigration programs that nominate individuals who want to start or invest in a business in their region. Each PNP has its own eligibility criteria and requirements.

Additional Considerations:

• Business Incorporation: Registering your business in Canada is a crucial step in the process. It establishes your presence and allows you to operate legally.
• Work Permit: In most cases, you’ll need a work permit to work in Canada, even if you own the business. You can apply for a work permit after your business is registered and you receive a positive LMIA (if required).
• Permanent Residency: After establishing your business and working in Canada for a certain period, you may be eligible to apply for permanent residency through various programs.

What is the minimum investment or support you must give in canada:

The minimum investment or support required to immigrate to Canada through business programs varies depending on the specific program:

Start-up Visa Program:

• Investment:
  • If the investment comes from a designated Canadian venture capital fund, you must secure a minimum investment of $200,000 CAD.
  • If the investment comes from a designated angel investor group, you must secure a minimum investment of $75,000 CAD.
  • If the investment comes from a designated business incubator, there is no minimum investment required, but you must be accepted into the incubator program.
• Support:
  • In addition to the investment, you must meet the program’s eligibility requirements, including language proficiency, education, and settlement funds.

Self-Employed Persons Program:

• Investment: There is no set minimum investment requirement for this program.
• Support: You must demonstrate relevant experience in cultural or athletic activities or farm management, as well as the intention and ability to become self-employed in Canada.

Owner-Operator LMIA Program:

• Investment: The minimum investment required depends on the type and size of the business, as well as the province or territory where you plan to operate.
• Support: You must obtain a positive Labour Market Impact Assessment (LMIA), demonstrating that your business will create or maintain employment for Canadians.

Provincial Nominee Programs (PNPs):

• Investment and support: The minimum investment and support requirements vary significantly between different PNPs. Each province and territory sets its own criteria based on its economic needs and priorities.

Important Note:

• These are just the minimum investment or support requirements. You may need to provide additional funds to cover settlement costs, business expenses, and living expenses for yourself and your family.
• It’s essential to research the specific requirements for each program and consult with an immigration lawyer or consultant to determine your eligibility and the best pathway for you.

2. The Self-employed Persons Program, This  focuses on businesses related to the arts, entertainment, and sporting industries.

If you’re interested in this program, you must:

1. Have relevant experience in cultural activities or athletics and
2. Be willing and able to make a significant contribution to the cultural or athletic life of Canada

To immigrate as a self-employed person in Canada, you must:

1. To immigrate to Canada as a self-employed person, you must fulfill the following criteria:

   1. Relevant Experience:

      • You must have at least two years of experience in cultural activities or athletics within the five years before you apply.
      • This experience can be either as a self-employed individual or participating at a world-class level.

   2. Intention and Ability to be Self-Employed:

      • You must demonstrate your intention and ability to create your own employment in Canada and make a significant contribution to the cultural or athletic life of the country.

   3. Selection Criteria:

      • You must score a minimum of 35 points based on the program’s selection grid, which evaluates factors like experience, education, age, language abilities, and adaptability.

   4. Medical, Security, and Other Conditions:

      • You and your family members must meet the health and security requirements.
      • You must also demonstrate that you have no criminal record and are admissible to Canada.

   Note:

   As of April 30, 2024, Canada has temporarily paused new applications for the Self-Employed Persons Program. This means that they are not currently accepting new applications under this program. It is important to check the official Government of Canada website for the latest updates on the program’s status: