Starting a business in Canada? Congratulations! Before starting up any operations, don’t miss out on the essential step of registering your business. This step is not just a formality; registering your business establishes your company as a legal entity. You can then open a bank account, apply or get access to financing and government grants, enter into contracts, protect yourself from liability, and set the foundation for a compliant business in Canada.
As a foreigner or immigrant start-up entrepreneur in Canada, you are eligible to register a business here if you are a:
- Canadian citizen
- Permanent Resident
- Landed Immigrant
- Foreign resident having a business in Ontario
Here is an easy step-by-step guide for you to register your business in Canada.
Before embarking on the actual registration process, you will need to be prepared with these:
- Main Office location
- Provinces and territories of operation
- Type of business structure
- Proposed business name
Step 1: Select a Business Structure
In Canada; there are three types of Business Structures: Sole Proprietorship, Partnership, and Corporation.
A popular business structure for new entrepreneurs is a sole proprietorship because of its informal and easy-to-create nature. With this structure, the business and its owner are viewed as one entity by both law and tax authorities. However, a sole proprietor assumes full personal liability for all aspects and debts of the business.
A partnership involves two or more proprietors; its set up is similar to a sole proprietorship. It lacks a formal legal structure like a sole proprietorship, but partners typically have a contractual agreement between them that governs role, revenue, expenses, and responsibilities.
Incorporating a business in Canada involves creating ownership shares and providing a taxation and legal distance between the company and its shareholders. It comes with liability protection, protection over the company name, and tax advantages. However, setting up a corporation comes with ongoing legal and accounting costs. A corporation can be incorporated Federally or Provincially in Canada.
Here is a detailed breakdown of the Pros and Cons of each type of business structure in Canada:
Step 2: Select a Business Name
Now that you’ve selected your business structure. Have you picked out a business name? Amazing! But do you know there are different types of business names to be registered in Canada? Have you checked if it’s taken? Follow these steps to complete your business name selection.
Types of Names to be registered
There are two types of names to be registered in Canada. A corporate name registration and a trade name registration.
- Corporate Name: If you incorporate federally in Canada, you will exclusively use your corporate name nationwide. If you are incorporating provincially or territorially, you have exclusive use of your corporate name only within the province or territory where you incorporate. This becomes your legal name.
- Trade Name: In the operation of your business, if you want to use another name apart from your legal name, that too must be registered. E.g., Your legal name is Arya Bakeries Inc., but you are marketing it as Arya’s Fresh Bakes. This registration falls under provincial/territorial jurisdiction.
- Trademark: Even if you’ve already registered your name federally or provincially, you can add an extra layer of protection with a trademark. It protects your products and services from imitation and misuse, allows you to flag an infringement under the Trade-marks Act, opens up licensing opportunities, and more.
Picking a business name
Picking a name for a Corporation is not as straightforward as it sounds. They are required to match strict guidelines under the Canada Business Corporations Act:
- Select a unique name: Your business name should be one that
- is distinctive
- should not confuse with any existing corporate names, business names or trademarks
- should not contain any prohibited terms
- should not suggest governmental or institutional sponsorship or control
- should not be misdescriptive, and
- should contain a mandatory term if required.
2. Check if the name is taken: If your chosen business name is already selected or sounds very close to an existing corporate name or trademark, legally, you will not be allowed to use it. Below are three ways to determine if your name can be registered:
- The internet, of course: Check domain names and social media handles to see if companies with the same or similar names exist. Especially if your business is aimed at customers from across the globe, it’s better to do a sweeping check on the internet.
- National name databases: Conduct searches in Canadian databases such as the Canadian corporate names and trademarks database (Nuans) and Canada’s business registries. For some registrations, it is mandatory to show a Nuans report before incorporating.
- Trade names across Provinces: Apart from the aforementioned National Databases, browse trade names (or operating names, different from corporate names or trademarks) in other provinces and territories if you wish to do business there.
– Alberta: Corporate registry search
– British Columbia: Name search
– Manitoba: Companies search
– Saskatchewan: Existing businesses search
– New Brunswick: Corporate affairs registry search
– Newfoundland and Labrador: Request a name search
– Northwest Territories: Corporate registry search
– Nova Scotia: Business search
– Nunavut: Business search
– Ontario: Public record search
– Prince Edward Island: Corporate/business names registry
– Quebec: Enterprise search
– Yukon Territory: How to find out what names are available
Note: Registering a trade name at the provincial and territorial level does not give a business exclusive rights to use that name at the federal level.
Step 3: Register your business
Sole Proprietorship or Partnership Registration in Canada
Both Sole Proprietorships and Partnerships are unincorporated businesses.
If you have selected sole proprietorship but are doing business under your own legal name, first and last name, eg, Karl Jones, you are not required to register the proprietorship name. However, if you are using a business name like Karl Jones Consultancy or Turnkey Consultancy, you are required to register. However, it is always better to register your proprietorship name to ensure credibility and other legal benefits.
If you are setting up a Partnership, the process is the same as Sole Proprietorship. Follow these steps to register:
A. Register with your selected province/territory: Depending on which province you operate in, you must register with your province or territory. Find the provincial or territorial business registrar website to move to the next step. The process to register online for Ontario through the registrar’s website includes:
- Creating a ONe-key Account
- Registering for a Service Ontario Account
- Paying an amount for the business type (Sole Proprietorship and General Partnership Registration costs $60 in Ontario)
- Filling out the paperwork/forms online and registering your Sole Proprietorship.
You will now be registered for a 9-digit Ontario Business Identification Number (BIN) from Service Ontario. Which you can use in the future to incorporate, create an import/export account, and register for an account with the Canadian Revenue Agency (CRA, where you are assigned your Business Number – BN)
B. Register for GST/HST: If you’re expecting to make more than C$30,000 per year, you are required to register for a GST/HST number. If you’re not, it is still recommended to get it done because of the various advantages, such as claiming input tax credits against your business income. This can be done through the Canada Revenue Agency’s Business Registration Online (BRO)
C. Check for Licences: Based on your industry and municipality, you can browse through BizPal to find relevant licences related to your business.
Services in Ontario like OWNR and Good Lawyer can handle these processes end-to-end with their start-up-friendly packages.
Corporation Registration in Canada
If you’ve selected Corporation, great move! Your business can enjoy the same rights as a person in Canada. This structure gives owners limited liability, lower tax rates, government grants, and a continuous existence (even after you die).
Incorporating your business in Canada starts by selecting between Federal Incorporation and Provincial Incorporation.
Here are a few key differences between Federal and Provincial Incorporation
Steps for Federal Incorporation in Canada:
The federal incorporation process costs C$200 online. You will need an ISED account to get started. An ISED Account is a security measure implemented by Corporations Canada and Innovation, Science and Economic Development Canada (ISED).
Federal Incorporation gets you many other registrations at the same time.
- Articles of incorporation
- Federal business number
- Federal corporation income tax program account
- Option to register for other federal tax accounts, such as GST/HST, payroll, import/export
- Option for extra-provincial or extra-territorial corporation registration
Steps for Provincial Incorporation in Canada:
Find your provincial or territorial business registrar website to register a Business Corporation here:
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Prince Edward Island
Start your online Provincial Incorporation registration process for Ontario here:
A. Register with your selected province/territory
- Creating a ONe-key Account
- Registering for a Service Ontario Account
- Paying C$300 as the Business Corporation Registration Fee
- Filling out the paperwork/forms online
While registering a Provincial Business Corporation, you will also need to show an Ontario-biased or weighted Nuans name search report to reserve your business name if you are not using a number name. The Nuans’ name search cannot be Canada (federal) biased. Services like OWNR and Good Lawyer can help guide you with Nuans reports from private name search companies, which is mandatory.
You will now be registered for a 9-digit Ontario Business Identification Number (BIN) from Service Ontario. Which you can use to incorporate, create an import/export account, and register for an account with the Canadian Revenue Agency (CRA, where you are assigned your Business Number – BN)
B. Register for GST/HST: As a corporation, you are required to register for a GST/HST number. This can be done through the Canada Revenue Agency’s Business Registration Online (BRO)
C. Check for Licences: Based on your industry and municipality, browse through BizPal to find relevant licences related to your business.
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