What is the best way to register your business in Canada? Does choosing a corporate structure necessary? Here is everything you need to know!
Canada is one of the best countries to start a business, achieve financial independence, and live a happy and prosperous life. You can run a small business in this country and make thousands of dollars in profit before registering your company and living a higher standard of living.
However, such a company falls under the category of a sole proprietorship. Registering your business in Canada involves registering your business name, getting a GST or HST number, and incorporating your company. Today’s article will describe a step-by-step approach to doing the job professionally. Read on!
Determine Your Corporate Structure
According to Tarek Riman, a Montreal-based entrepreneur and author of bestselling books, determining your corporate structure is critical before registering your business.
Generally, businesses choose to run as a partnership, sole proprietorship, or corporation in Canada. However, you can get information about other corporate structures, such as a limited partnership or cooperative business.
A sole proprietorship is your business’s best and most reliable corporate structure. We recommend registering your company as a sole proprietorship if you have enough money to start and run a business.
A partnership is an integral part of the corporate structure in Canada. It is ideal for people who want to run a business in partnership with others. However, each partner must contribute money, property, labor, and other assets. Each partner will get a share based on the written agreement.
A corporation is another type of business structure in Canada that requires people to register or incorporate their businesses. The purpose is to create a legal entity, meaning your company can take risks without impacting your personal finances.
Register Your Business Name
Once you have decided upon the corporate structure, it is time to register your business name. All businesses in Canada require completing name registration except for sole proprietorships.
The reason is that sole proprietorships allow people to use their names without registering a business name. Remember, each province has a different registration procedure. However, you can search for a business name through:
- The Canadian Corporate Names
- Trademark Databases
The database allows you to choose a specific name for your business without conflicts with other companies. Next, you must register your business name in your province registry. The good news is that you can perform this activity online.
The cost of registering a business name varies in different provinces. For example, when you register a name in Ontario, expect to pay between $60 and $80. On the other hand, people pay between $8 and $26 to search for names via the corporate names databases.
Register for a GST/HST number
Once you have registered a business name, apply for the GST/HST registration number. You can do this online, by phone, by email, or by fax. The Canadian law requires businesses must register for a GST/HST number if they make more than $30,000 a year. If your company does not generate more than $30,000, you can still register for a GST/HST business number.
However, this is not mandatory. When you become a GST/HST registered business, you can complete and file for a GST/HST return and remit your taxes to the government. Remember, you can claim back the GST or HST you have paid.
Although registering a business in Canada is not daunting and time-consuming, you must understand the requirements to streamline the process and do the job professionally, efficiently, and quickly. Until Next Time!
- Article based on personal opinion, experience and research.
- Photos from Unsplash & canva.