Starting a business in Canada can be exciting, but understanding the registration process is essential for success. This article outlines the various steps and requirements for registering a business, from selecting the appropriate structure to complying with federal, provincial, territorial, or local regulations. Proper registration helps ensure legal compliance and builds a strong foundation for growth. Whether you’re establishing a sole proprietorship, partnership, corporation, or cooperative, knowing the details of the registration process is vital.
Table of Contents
Is business registration required?
Business registration is required in Canada if you operate a business under a name other than your own legal name. Registering your business name helps protect it, stopping other businesses from using the same name in the area where it is registered. Registration also allows business activities such as opening a business bank account, obtaining business insurance, accepting payments under the business name, and applying for licenses, permits, or grants.
Business owners may also need to register their business with the Canadian Revenue Agency (CRA) to get a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) number if their gross revenue exceeds $30,000 in a single calendar quarter or over four consecutive calendar quarters. This process is separate from registering a business name.
How to register your business in Canada
Before legally operating your business in Canada, you need to complete a few essential steps to ensure you’re properly registered and compliant with government regulations.
- Choose your business structure: Decide whether your business will be a sole proprietorship, partnership, corporation, or cooperative. Incorporation is a different process than the registration process below.
- Choose a business name: Your name should be unique and not conflict with existing registered names.
- Register your business name: Business names must be registered with the provincial or territorial government unless you use your legal name. Here’s where to register in major provinces:
- Ontario: Ontario business registry
- Quebec: Enterprise register
- British Columbia: BC business registry and online services
- Alberta: Alberta.ca — Register a business name
- For other provinces and territories, visit the specific business service website for the province.
- Register for a business number (BN) with the CRA: This is required to collect GST or HST, hire employees or important and export goods. Register online on the CRA business registration web page.
- Check for additional licenses or permits: Depending on your industry and location, you may need municipal business licenses, zoning clearance or sector-specific permits.
Why should employers register their business?
Registering a business meets government requirements and gives access to important tools, such as opening a business bank account, GST or HST registration, and issuing official invoices. It helps build credibility with clients, separates personal from business finances, and opens opportunities for tax deductions and credits that are not available to individuals.
What are registration and incorporation?
Registration and incorporation are essential legal steps for setting up a business, each providing different degrees of structure and protection.
Business registration is needed when an individual or partnership operates under a name other than their legal name. This process is conducted at the provincial or territorial level and allows the business to legally operate under its chosen name, open a business bank account, and comply with local regulations.
Incorporation involves establishing a separate legal entity with the federal government. It offers significant benefits, such as limited liability protection, increased credibility, potential tax advantages, and improved access to financing. You must register your business before you can incorporate. The table below compares the key features of sole proprietorships, corporations and cooperatives to help you choose the right structure for your business.
|
Registering (partnership or sole proprietorship) |
Incorporating (corporations) |
Registering (Cooperative) |
|
|
Legal status |
Not a separate legal entity |
Separate legal entity from its owners |
Separate legal entity from its owners |
|
Liability Protection |
No liability protection; owner(s) are personally liable |
Limited liability |
Limited liability for members |
|
Cost |
Lower setup costs |
Higher setup cost |
Moderate to high setup costs |
|
Tax |
Income taxed at personal rates |
Lower corporate tax rate |
May qualify for special treatment (e.g., patronage dividends) |
|
Raising capital |
Personal funds or loans |
Can issue shares and attract investors |
Members contribute shares, and some may issue investment shares |
|
Geographic scope |
Your business needs to be registered in each province or territory where you operate |
Federal corporations can operate across all provinces |
Federally or provincially registered |
FAQs
How much does it cost to register a business in Canada?
The cost of registering a business in Canada varies by province and business structure. Generally, you can expect to pay between $60 and $300 for registration fees. Additional costs might include name searches or licences, which can increase the total expense. It's important to check your province's specific requirements and fees for accurate budgeting.
What documents are required to register a company in Canada?
To register a company in Canada, you'll usually need a business name registration form, identification documents like a driver's license or passport, and a partnership agreement if relevant.
Do I need a business license in Canada?
Yes, in most cases, you will need a business license to operate legally in Canada. The requirements can vary depending on the type of business and its location. Some municipalities may require specific licenses or permits for certain industries, so it’s important to check with local government offices to ensure compliance.
How do I legally start a business in Canada?
To legally start a business in Canada, you should first select a business structure. Will you operate as a partnership, sole proprietorship, corporation, or cooperative? Next, register your business name and obtain the necessary licences and permits. After that, you may need to open a business bank account, register for taxes, and meet any required insurance obligations.
Can I start a business without a work permit in Canada?
Starting a business in Canada as a non-resident requires a work permit; however, some exceptions exist, especially for remote businesses that do not need physical presence in Canada. It's advisable to consult with immigration authorities or legal experts to understand visa requirements and ensure compliance with government regulations.
How do I start a self-employed business?
Starting a self-employed business involves selecting an idea that matches your skills and market demand. Then, you'll need to register your business name, if applicable, and acquire any licenses required for your industry. It’s also important to set up accounting systems, open a business bank account, and, if needed, register for taxes.
What are the different business structures?
The main types of business structures in Canada include sole proprietorships, partnerships, corporations, and cooperatives. A sole proprietorship is owned by one individual, whereas a partnership involves two or more people. Corporations are separate legal entities that provide liability protection to owners, and cooperatives are member-owned organizations focused on mutual benefits. Each structure has its own advantages and disadvantages depending on factors such as taxation, liability, and operational needs.
What are cooperatives in Canada?
A cooperative is a business owned and democratically controlled by its members, who use its services or products. Unlike corporations, co-ops focus on meeting members’ shared needs rather than maximizing profit. Members typically have one vote each, regardless of investment. Profits may be returned to members as patronage dividends, based on how much they use the co-op rather than how much they invest.
