Corporate Registry Solutions Canada Buisness Name Registration FAQS

Corporate Registry Solutions Inc

Canada Sole Proprietorship Registration Frequently Asked Questions

Frequently Asked Questions about Registering a New Business Name in Canada

What is a Sole Proprietorship?

The Sole Proprietorship is the most common form of business structure. The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibilities for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts. In the eyes of the law and the public, you are one in the same with the business.

Tax Considerations for sole proprietorships

If you are a sole proprietor, you pay personal income tax on all revenue generated by your business. You also assume all the risk of the business. Any income or losses are claimed on the owner’s personal tax return each year. Business deductions are permitted.

As a sole proprietor, your income tax and benefit return must include financial statements or one or more of the following forms, as applicable:

* Form T2124, Statement of Business Activities
* Form T2032, statement of Professional Activities
* Form T2042, Statement of Farming Activities
* Form T1163, Statement A-NISA Account Information and statement of Farming
* Activities for Individuals, and
* Form T1164, Statement B-NISA Account Information and statement of Farming
* Activities for Additional Farming Operations; or
* Form T2121, Statement of Fishing Activities

As a sole proprietor, you have to register for the goods and services tax/harmonized sales tax (GST/HST) if your worldwide annual taxable revenues are more than $ 30.000.

Liability

Owners are personally liable for the debts of the business. This also means that should the business fail, the owner’s personal assets are at risk.

Duration

The business ends with death or incapacity of owner.

Advantages

* Low start-up cost
* Greatest freedom from regulation: few formalities and low organizational costs
* Fewer reporting requirements to government agencies
* Tax advantage to owner
* Avoidance of corporate “double tax”
* Business lossess may be taken as a personal income tax deduction to offset income from other sources
* Owner in direct control of decision making
* Minimal working capital required
* All profits taxed as income to owner at the owner's personal income tax rate
* Registration of a trade name is available to prevent confusion resulting from deceptively similar business names

Disadvantages

* Unlimited liability
* Lack of continuity in business organization in absence of owner
* Difficulty in raising capital
* Loans based on credit worthines of owner; and
* Owner's assets subject to business liabilities

Do I need to register my sole proprietorship?

If you choose to carry on a business under a name other than your own personal name and are engaged in business for trading, manufacturing or mining purposes, you must register with the Corporate Registry within three months of your business start date. Note: Registration does not provide protection for the name and does not mean that the name will be available if you decide to incorporate a company using this name at a later date.

Sole proprietorships (one owner) operating in Canada or wishing to operate in Canada are not required to be registered if the business is carried on under the owner’s name. If the business uses a business name other than the owner’s name, they are required under Provincials Partnership Acts to register their business name before start using it. Registration is done by filing a declaration of trade name form with the Provincial Corporate Registries.

Registering your business name

One of your first tasks when setting up a new business will be to register it. NBiS Corporation simplifies to the maximum the task of registering a new business name in Canada, by offering an easy on-line business name registration service for only $39.99 + Gov fees. To place an order, please continue here

What are the steps to register my business?

First is the Name Search. A Provincial Business Name Search Report should be obtained. This is a search through the Corporate Registry Office records that will determine whether another business is using the name you have selected and where that business is located. Once your business name is approved, this name will be reserved for 56 calendar days. During this time you must submit your declaration form for a Sole Proprietorship or Partnership or file your Incorporation papers.

Second Statement of Registration of Sole Proprietorship is completed with the Provincial Corporate Registry Office.

The third element is the fee to register your Statement of registration of sole proprietorship and expedition of your Business License.

What is a Business Number?

The Business Number (BN) is a unique number assigned to a business by the Canada Revenue Agency (CRA). It allows businesses to access services with participating agencies using one number. To apply online for a business number, please continue here

How does a business obtain a Business Number (BN)?

Each sole proprietor, partnership, or corporation will get one BN. Sole proprietors will get one BN for all of their businesses (except any business that is registered under a partnership, trust, or corporation).

The business number (BN) is a federal numbering system that simplifies and streamlines the way businesses deal with the Canada Customs and Revenue agency (CCRA).

To apply online for a business number, please continue here

Do I need to apply for a Provincial Sales Tax (PST) Account?

Yes, if you engage in business activities such as selling or leasing taxable goods or services as:

  • Regularly make taxable sales of goods: alcoholic beverages, automotive parts an supplies, building materials, cigarettes and other tobacco products, flowers, general merchandise such as cosmetics, appliances, souvenirs, clothing, art supplies, household or office furniture, motor vehicles, propane (not a complete list. Further information can be obtained from your local retail sales tax Branch).
  • Leasing goods as a lessor
  • Providing legal services
  • Selling parking rights
  • Provide taxable services. A taxable service is any service provided to install, assemble, dismantle, repair, adjust, restore, recondition, refinish, or maintain tangible personal property: i.e. automobile maintenance and repairs, furniture repairs, re-upholstery, and refinishing, installation and servicing of software, maintenance of business equipment, such as cash registers, photocopiers, and computers. Watch repair and maintenance. (not a complete list. Further information can be obtained from your local retail sales tax Branch).
  • Providing telecommunications services
  • Act as liquidator, receiver, receiver-manager or trustee and dispose of assets in the cause of your business.

To register for the PST , please continue here

Do I need to apply for a Hotel Room Tax (HRT) Account?

Yes, if you make sales of taxable accommodation.

Do I need to register with Workers' Compensation Board?

Virtually all employers in Canada are required to register with Workers' Compensation Board Alberta. as soon as they hire workers. Individuals who are not automatically covered by Work Safe (a partner in a business, a proprietor, or the spouse of a proprietor) can apply for optional coverage through Personal Optional Protection. To register your business with WSIB, please continue here

Do I need to register for Goods and Services Tax / Harmonized Sales Tax (GST/HST) with the CRA?

Yes, if you sell or provide goods and services in Canada and your annual, world-wide GST/HST taxable sales, including those of any associates, are more than $30,000.00. To register your business for the GST, please continue here

Do I need to register for Payroll Deductions with the CRA?

Yes, if you are an employer and pay salary, wages, bonuses, vacation pay or tips to your employees; or you provide a benefit, such as board and lodging, to your employees. To open a payroll deductions account with the CCRA, please continue here

Do I need to register for an Import and/or Export account with the CRA?

Yes, if you are a commercial importer and/or exporter. To open a Import/Export account with the CCRA, please continue here

Do I need to register for Corporate Income Tax with the CRA?

Yes, if your business is federally or provincially incorporated, or you are a non-resident corporation operating in Canada. The CRA registers most Canadian corporations for corporate income tax and assigns a Business Number shortly after incorporation. Companies incorporating federally or in Manitoba, New Brunswick, or Nova Scotia are registered for corporate income tax with the CRA and receive a Business Number immediately upon incorporation. To open a Corporate Income tax account with the CCRA, please continue here

Do I need a Municipal Business Licence?

Most municipalities require the licensing of business premises.

Business licence applications are available from the municipal office. Fees and types of licences are determined by municipal bylaws, and vary from one municipality to another. At present, business licences are not required in non-municipal areas of the province.

You may also be required to obtain a non-resident business licence for municipalities in which you conduct business but do not maintain premises. If you are involved in direct sales or providing services to the end consumer, contact each municipality in which you are selling goods or services to determine whether or not a non-resident business licence is required.

In addition to business licences, municipalities administer the licensing of commercial vehicles.