Nunavut Business Name Registration Frequently Asked Questions
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Frequently Asked Questions about Registering a New Business Name in Nunavut
Registering a business name in Nunavut does not mean that you own that name. Many sole proprietorships and partnerships in that province operate with duplicate names, as there is no requirement under the Business Names Act for a business name to be unique. As well, Nunavut Corporate Registries has no obligation to avoid name duplication or to advise anyone registering a name that has been previously registered.
What is a Sole Proprietorship?
The Sole Proprietorship is the most common form of business structure in Nunavut. 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.
Sole proprietorships (one owner) operating in Nunavut or wishing to operate in Nunavut 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 the Nunavut Business Names Act to register their business name before start using it. Registration is done by filing a declaration of business name form with the Nunavut Corporate Registries Office.
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
The process of register your Business/Trade Name in Nunavut, has three main elements:
First is the Name Search. A Nunavut 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.
Second Registration of your Business Name is completed with the Corporate Registry Office.
The third element is the fee to register your Business Name and expedition of your Business License.
Fees:
Name Search & Reservation: $ 61.24
Registration Fees:$55.00
Our Service Fees: $39.99
GST (6%):$2.39
Total:$ 158.62
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