By Mark Swartz
Starting a business is an adventure. The appeal of running your own show is popular: more than 15% of Canada’s workforce opts for self-employment or entrepreneurship.
Depending on the level of revenues and whether there are employees, a business may have to register with government for a name and Business Number (BN). This allows it to continue operating legally and receive proper tax treatment.
What a Business Number Provides
The BN is a nine-digit identifier for businesses to simplify their dealings with federal, provincial, and municipal governments in Canada.
This includes income taxes, payroll deductions, corporate taxes (if incorporated), export-import accounts and excise duties. Many provinces also tie the BN to licenses, permits and Workers’ Compensation.
When It Isn’t Necessary To Register
Not all people engaged in business activity need a Business Number. Exceptions are allowed when:
- Total revenues from all such activities before expenses are under $30,000 over the last four consecutive calendar quarters, and
- The business has no employees, therefore it doesn’t need to sign up for payroll tax, and
- There is no importing or exporting of goods involved
As soon as any of the above conditions is not met, it’s time to sign up for a BN.
How to Register A Business
Registration for a BN depends on where the company is located. For all provinces and territories save for Quebec, registering can be done via the Canada Revenue Agency (CRA), or with the province’s business registration site. If a business is in Quebec and is filing for a GST/HST program account, Revenu Québec is the governing agency.
Information That Must Be Provided
The amount of information that must be supplied when registering a business depends of the company’s structure. The following details may be required:
- the type of business or organization (for example: sole proprietorship, partnership, corporation, registered charity)
- the name, social insurance number (SIN) and occupation of all owners
- contact information
- the legal business name
- the operating name or trade name
- the physical address of the business
- the address of the business records
- the description of the major business activity
- an estimate of the business’s sales
After Registering For a Business Number
Once the small business registration process is completed, you may be contacted to confirm the information provided. Assuming everything checks out a BN will be assigned to your business.
If you registered for a GST/HST program account you will receive a confirmation letter for that. As well a unique GST/HST program account number will be provided. The same goes for other program accounts, such as payroll deduction and import-export.
Business Name Registration
Almost all businesses in Canada must legally register their business names in their respective provinces or territories. The exception is for sole proprietorships that use only the owner’s legal name. No registration is required for these.
By law, the business name can’t be the same as (or very similar to) an existing corporate name or trademark. The name reservation process therefore has two stages: (1) a preliminary search of the provincial name Registry database, and (2) a more exhaustive search by NUANS (an independent agency specifically responsible for federal and provincial name searches) including federally incorporated companies and trademarks. Fees may apply to both.
As a bonus, these searches can be considered part of gathering market intelligence.
Where to Register A Business Name
After the name searches reveal no conflict, apply for registration on the business registering site in the province where your business will be operating.
Fees will likely apply. These range from about $40 to $80, depending on provincial rates. Incorporated companies usually cost more because of added complexity if registering names both federally and provincially.
After Registering Your Business, Build Your Dream Team
Some small businesses are one-person operations, but even the smallest experience growth and may feel the need to hire employees. If you’re ready to take that next step, then you should consider posting your job at Monster. Get started today with a free job advertisement.