2019-01-15 13:07:49 Self Employed English Review this complete guide to registering your self-employed business in Canada. Find out what your province/territory & the CRA requires... https://quickbooks.intuit.com/ca/resources/self-employed/registering-your-self-employed-business/ Guide to Registering Your Self-Employed Business | QuickBooks

Guide to Registering Your Self Employed Business in Canada

15 min read

If you’re a self-employed business owner in Canada, you’re legally required to register your business. For most companies, this process involves registering your company name with the proper government authorities, registering your business as a legal entity, registering with tax authorities, and applying for the appropriate permits and licenses. Aside from the legal requirement, there are many advantages to registering your self-employed business.

Advantages of Self-Employed Business Registration

Business registration enhances your brand image and reputation, making your company more attractive to potential investors, business partners, clients, and customers. Registering your company as a separate legal entity protects your personal assets if your business is ever held accountable when something goes wrong. You’re also entitled to a range of tax benefits as a registered business owner. The most important reason to register your business is to ensure your compliance with Canadian law, which helps to create a more stress-free work experience.

Information You Need to Register

An important primary step in registering a business is deciding which type of business structure to register. Here’s a definition of the four Canadian business structure types you can choose from.

Sole Proprietorship

A sole proprietorship is the easiest structure to create and is often chosen by brand new business owners. If you choose this structure, you are the sole owner of your company and both you and your business are one and the same by law and in the eyes of tax authorities. All of the profits your business earns are yours to keep. If you ever need to satisfy business debts, as a sole proprietor anyone from tax authorities and creditors to individuals can make claims against your business as well as your personal assets.

Partnership

A partnership is similar to a sole proprietorship, as there is no legal separation between you and your business. The only difference is that there are two or more business owners. The business owners in a partnership combine their financial resources to pay for operational expenses. The partners typically have a contractual agreement that breaks down the percentage of ownership and distribution of revenue. There are three types of partnerships:

  1. In a general partnership, each partner is liable for business debts.
  2. A limited partnership allows a person to invest money or other assets into the business without giving that person the authority to make decisions regarding business operations.
  3. A limited liability partnership is only available to a specific group of professionals, such as doctors, lawyers, or accountants. With this structure, an accountant might partner with a tax attorney to offer more comprehensive services to clients. This arrangement allows these professionals to pool their resources, share office space, reduce business costs, and earn more profits than they might individually.

Corporation

A corporation (or incorporation) is a business structure that makes your self-employed business a completely separate legal entity. One or more shareholders own the business, and you earn a salary, just like all paid employees. Since Canadian law views you and your company individually, your personal assets remain untouched if you owe business debts or taxes.

It’s important to seek legal assistance if you choose this structure, since the set-up process is extensive. Owners of corporations must keep detailed records and reports of their financial information and must file these records with the government annually. A corporation is more costly to operate than a sole proprietorship or partnership is, and owners might have to prove Canadian residency or citizenship.

Co-operative

In a co-operative business structure, an association of members owns and controls the business. Co-ops are set up to meet the needs and expectations of their members. You can set this type of business up as a for-profit or not-for-profit entity, and participation from all members is typically necessary for success.

Choosing a Compelling Business Name

After you select a business structure, it’s time to choose a business name. Even if you already have one in mind, it’s important to make sure that the name you want to use isn’t already taken. There are a few important guidelines for selecting a compelling business name.

Ensure that the Name Reflects Your Product or Service

When you think of wildly successful businesses with abbreviated names, such as IBM, AT&T or DHL, you might consider abbreviating your business name. You might also consider choosing a name with sentimental value. While these aren’t necessarily bad ideas, it’s probably best to choose a name that educates your market about your product or service.

As a Canadian small business owner, you may not have the marketing funds necessary to educate the public about your business acronym or non-relevant business name. But if you’re a sole proprietor named Jay Brown who offers Catering services, “Jay Brown’s Catering” or “JB’s Catering” leaves no doubt about the services you offer and makes it easier to target your market.

Aim for Uniqueness

Try your best to choose a name that’s both unforgettable and unique. Business names that contain rhyming words, such as “Mandy’s Candies” or “Roy’s Handmade Toys,” are catchy and likely to stick in a potential client’s mind. Try your best to stand out from the crowd by choosing a name that remains memorable over time.

Simple and Web-Friendly Business Name

At some point, you probably plan to create a business website. It’s best if your company’s website address is the same name as your business or contains your business name, since this makes it easier for potential customers to find you online.

If you plan to choose a business name with a hyphen, exclamation point, asterisk, or purposely misspelled word, keep in mind that these types of names aren’t easy to remember, and they’re not search-engine friendly. It’s also a good idea to avoid extremely long business names. Even if your target audience eventually becomes comfortable with the name, search engine algorithms may not recognize your site as an authority. A good web presence can increase business, so selecting a simple, “short and sweet” web-friendly name is essential.

Exude Professionalism

The name you choose for your business plays an integral part when it comes to marketing. Your business name projects your company’s brand and image, so it should be professional. Think of how your business name might look on letterhead, as a company logo, or on a company advertisement. Does the appearance satisfy you and your target audience? Does the name sound professional when read aloud? Does the name evoke a sense of pride in you as the business owner? Would others be proud to associate with your company? Your business name can have a huge impact on your business, and it’s important to make sure its impact is positive.

Checking Business Name Availability

After coming up with a great business name, it’s time to find out whether or not the name is actually available. If the name you like belongs to an existing business, you can’t legally use it, you will have to choose a different one. It’s equally important to make sure the name of your business does not sound too similar to someone else’s business name, since this may cause problems with the other company and confuse potential customers or clients.

One of the easiest ways to find out if the name is available is through an internet search. Type the business name into Google, Bing, and every other major search engine you can think of. It’s also a good idea to check social media platforms such as Facebook and Twitter. If you plan to conduct business in multiple countries, you must check for the name’s use in those countries as well.

If you still feel good about using your chosen business name after conducting a thorough internet search, order a NUANS report from the Canadian government. A NUANS (Newly Upgraded Automated Name Search) report lists similar corporate names in all Canadian provinces and territories, except for Quebec. To search for business names in all territories and provinces, including Quebec, search the Directory of Canadian Companies. It’s also possible to search for business names in each individual Canadian province and territory by visiting the government registry website of each location.

Registering Your Business Name

The very first step in registering your business is registration of the business name. Most Canadian businesses must register a business name in the province or territory in which they plan to run the operation. There are a couple of exceptions.

The first exception is that if a sole proprietor uses his legal name as the business name, he doesn’t have to register the name. The name can’t contain any additions, such as Inc., Co., “and Sons,” or “and Partners.”

The other exception is if the business operates out of Newfoundland and Labrador and is either a sole proprietorship or a partnership, the owner doesn’t have to register the business name. A corporation is the only business structure that requires business name registration in this province.

Registering Your Self-Employed Business Federally

If your business is a corporation, the business registration process is more extensive than it is for other business structures. There are a few steps you must follow:

Step 1: File Articles of Incorporation

The Articles of Incorporation is a comprehensive form that establishes the structure of your corporation. This form requires you to provide your corporate name, your corporation’s province or territory, the share structure of your company (or the shares of your company owned or held by individuals or investors), the number of directors in your corporation, a list of restricted business activities, and any other provisions you want to make.

Step 2: Get a federal business number and Corporation income tax account from the Canada Revenue Agency

You can obtain both items by filling out the RC1 request form, available in PDF form on the CRA website.

Step 3: Register as an extra-provincial or extra-territorial corporation in all other Canadian jurisdictions

You must register your corporation in any province or territory where you plan to conduct business. You can amend this information as your business expands or downsizes. Keep in mind that you’re not required to register your corporation federally. You can incorporate your business in one or more Canadian provinces or territories at a time.

Step 4: Apply for the permits and licences your business needs

You might be able to obtain your business number, tax accounts, and provincial business registration during the incorporation process, depending on the territory in which you plan to operate.

Registering Your Business in Each Province

Once you register your business name, you can begin registering your business. This process simply requires you to let the government know about your business plans. Each province has its own specific rules and requirements for registering businesses.

  • Ontario (ON)

If you plan to conduct business in Ontario, you must register your business with the Central Production and Verification Services Branch (CPVSB). You must register if you’re a sole proprietor operating under a business name that’s not your legal name or part of a partnership that operates under a name other than the legal names of the partners. Also, limited liability partnerships, existing general partnerships, corporations, and extra-provincial limited liability partnerships must register their business names. Business registration is valid for five years, and you can renew 60 days before it expires.

  • Alberta (AB)

If conducting business in Alberta, visit the Alberta.ca website to register your business name. If registering a trade name or sole-proprietorship, fill out the Declaration of Trade Name form. If registering a partnership, fill out the Declaration of Partnership form. There are also Limited Partnership and Limited Liability Partnership forms available in case those apply to your business. If your business is a corporation, the Government of Alberta requires you to contact a service provider that’s authorized by the government to provide Corporate Registry services. You can find a list of Corporate Registry agents on the Alberta.ca website.

  • British Columbia (BC)

The first step for registering a business in British Columbia is to use the BC Registry Service to register your business name. You can also register your business name in person at any Service BC or OneStop location. After approval of your business name, which can take up to three days, contact BC Registry Services again to register your business. You may also complete this step online or in person. Approval of business registration takes approximately two months. At that time, you receive a business number (BN) that you use as your company’s identifier.

  • Quebec (QC)

If you own or operate a sole proprietorship or partnership in Quebec, Canada, that doesn’t include the first or last names of any of the owners, you must register your business within the first 60 days of operation. To register, complete a Declaration of Registration form. As of 2019, electronic filing is not an option, so you must take the form to a Registraire Des Entreprises Services Quebec (REQ) location in either Quebec City or Montreal. Quebec requires you to re-register a sole proprietorship or partnership each year.

To register a corporation in Quebec, you must fill out the Articles of Constitution form and the Notice Establishing the Address of Head Office/List of Directors form.

Submit these documents to one of the REQ locations in the province. Upon approval, the REQ gives you a corporation number and a certificate of incorporation. You must pay an annual registration fee to maintain your corporation number.

  • Manitoba (MB)

In Manitoba, your first step is to register the name of your business through the Companies Office Name Reservation website, which is part of the province of Manitoba’s official government site. Manitoba uses an online service called BizPal to simplify the process of figuring out which business licenses or permits your company needs. Corporation owners must file an Articles of Incorporation document, which you can complete online. Non-profit entities must also file an Article of Incorporation. Unincorporated businesses, limited partnerships, and limited liability partnerships must renew their registration every three years.

  • New Brunswick (NB)

In New Brunswick, you must first register your business name by filling out the New Brunswick Certificate of Business Name or Certificate of Renewal of Business Name form. Submit this form to the Corporate Affairs Branch. Once you secure your business name, apply for a Business Number (BN) through the Corporate Affairs Branch.

If you’re applying for a sole proprietorship or partnership, New Brunswick’s official government website offers kits and guides that simplify the application process. To incorporate your business, file an Article of Incorporation with Service New Brunswick. You can file all of your documents online.

  • Newfoundland and Labrador (NL)

If your company is a sole proprietorship or a partnership that operates in Newfoundland and Labrador, you don’t have to register your business. The province requires registration if you decide to incorporate your business within the province. The first step to incorporation is to request an official Name Reservation through the Registry of Companies. Next, file an Articles of Incorporation, Notice of Directors, Notice of Registered Office in NL, and Certificate of Good Standing. You can find all of these forms on the Registry of Companies website.

  • Nova Scotia (NS)

If you’re a sole proprietor who uses your legal name as your business name, you don’t have to register your business in Nova Scotia. For all other structures, the law requires business registration. Your first step is to register your business name with the Nova Scotia Registry of Joint Stock Companies. You can complete this step using the Nova Scotia Government Online Service for Businesses. Next, determine if you must apply for a Business Number (BN). Not all companies require BN registration, only those that require a payroll, corporate income tax, import/export, or GST/HST account.

Next, obtain the licenses and permits necessary to legally operate your company through the Nova Scotia Government Online Service for Businesses. If you plan to incorporate, the government requires getting legal assistance. Nova Scotia corporations must have recognized agents who act as a legal contact for the company. These agents provide the Certificate of Incorporation as well as all the other forms you need to register your corporation. Upon approval, the government assigns your corporation a BN.

  • Prince Edward Island (PE)

Unless you’re a sole proprietor who plans to use your legal name as your business name, your business in Prince Edward Island requires registration. The first step is to register your business name with the Government of Prince Edward Island. You must register a sole proprietorship or a business partnership within three months of operation.

To incorporate your business in PEI, an officer of your company, such as the CEO, President, or Vice President, must fill out a Declaration for Registration of a Business Name – Corporation form. Upon approval, the province lists your business in its Royal Gazette, which is PEI’s official listing of government documents. PEI requires business registration renewal every three years.

  • Saskatchewan (SK)

Sole proprietorships and partnerships in Saskatchewan that operate under a business name require business name registration. If you plan to incorporate your business, you don’t have to register your business name in this province, but you must file an Articles of Incorporation, obtain a business licence and obtain a BN. Contact the Corporate Registry at Information Services Corporation (ISC) in SK to start the registration process. Once the ISC reserves your business name, you must register your business with the Corporate Registry, Ministry of Finance, and Saskatchewan Workers’ Compensation Board. The Corporate Registry of SK has an online portal where you can file all of your documents electronically.

Length of Self-Employed Business Registration Process

Once your province receives all of your information and the associated fees for each form, you can expect a turnaround time that lasts between 3 and 60 days, but it can take longer. The length of time depends on a variety of factors, including the type of business structure, the province, and your filing method.

Missing items or unsigned forms delay the process, so perform a thorough review of each page before submission. Upon approval, you receive either a certificate of compliance or certificate of incorporation, depending on your business structure. You can also request a certified copy of your Articles of Incorporation after completing the process.

What Do You Do After Registering Your Business?

Once you register your business, you’re ready to begin operating as a legal entity in Canada. QuickBooks Self Employed can help your business operate more professionally. You can customize invoices with your new business name and get paid faster using the payments feature. With this software, you can also track expenses, such as the fees required to register or amend your business name and easily see cash flow through the reports.

QuickBooks Self-Employed helps freelancers, contractors, and sole proprietors track and manage business on the go. Join 5.6 million QuickBooks Users Today.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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