How to Register a Business in Canada

Starting a business sounds like a daunting ordeal. Especially when it comes to the paperwork of registering a business. However, you’ll be surprised to know that registering a business in Canada is not that hard. It’s a pretty simple process that shouldn’t take too much time. Plus, you can do it from the comfort of your own home. Here’s what you need to know about how to register a business in Canada.

Who can register a business in Canada?

Most people assume that in order to have a business in Canada you need to be a citizen or resident. This is actually not the case. You do not have to be either to open a business or a branch in Canada. That being said, you will be taxed higher than a business registered by a Canadian citizen or resident, but the lack of either of those statuses will not prevent you from registering a business in Canada.

How do I register a business in Canada?

Registering a business in Canada is fairly simple, but there are a few things to do first. Before you start the process, you will need to have the following information on hand.

Your location

This is where the main office of your business will be located.

Your area of operation

What provinces, outside the one in which your main office is located, do you plan to operate in.

Your business name

You’ll want to choose a name that reflects what your business is about plus something that is easy to remember. Once you think you have chosen the name you want, you need to check and make sure that the name isn’t already taken. To start with, you can search the internet to see if anything else comes up. Once you have done that, you can search national name databases. There are two main name databases in Canada. The first is the Canadian Corporate names and Trademarks Database (Nuans) which you can find here. The second is Canada’s Business Registries which you can find here. Keep in mind that registering your business name doesn’t give you exclusive rights to use it. For name protection, you will need to trademark it.

Your type of business

What type of business best suits your purpose and needs? There are four main options to choose from.

• Sole proprietorship
• Partnership
• Corporation
• Cooperative

Once you have all that sorted it’s time to register. You can register your business in Canada online, over the phone, by mail or even by fax depending on what you are most comfortable with. The Government of Canada has all the details for whatever route you choose to go on this page here.

After you have registered your business, you will receive a business number. This number is 9 digits unique to your business. For Canada Revenue Agency (CRA) program accounts, you will also be assigned 2 letters and 4 digits attached to your business number. These are only used in specific circumstances when the information must be reported to the CRA.

If at any point you want to change the legal ownership of your business or change the structure of your business, you might be required to register for a new business number.

Once you have your business number set up and registered you can then look into any required licensing and permits. You may also be eligible for financing or grants. Finally, you may also want to consider incorporating your business, either federally or provincially. This is a more costly process than just registering your business and requires more work to set up and maintain. However, it comes with a lot of advantages as well.

Do I have to register my business in Canada?

While there are many advantages to registering your business in Canada, not all businesses need to be registered with their province. If your business is a sole proprietorship and you are only using your legal name as your business name, then you don’t need to officially register your business. In Newfoundland and Labrador, you don’t need to register your business if it’s a partnership either. However, depending on where you are located and the type of business, you may still need to register your business within your municipality. If you are unsure of how things work in your area, you can find regional business support here.

What about small business taxes?

As said above, you may not need to register your business. However, depending on the type of business, you may have to register for a GST/HST account.

If you make taxable sales, leases, or other supplies in Canada and you exceed $30,000 over four consecutive calendar quarters then you will be required to apply for a GST/HST account. Once you hit this point you will be required to charge GST/HST on your services or products to your clients. You will collect this tax and then pay it back to the government. The added benefit is that you can also claim the GST/HST on any goods or services that you use related to your businesses.

It is also possible to register for one before you hit this status if you choose to do so. Applying for a GST/HST account, even if you don’t need one yet, can be advantageous. This is especially true in the case of freelancers as it can add credibility and professionalism. 

You can register for a GST/HST account online, by mail or fax, or over the phone. Learn more here.