Starting a business in Canada? There are a few things that you need to know in order to get it right the first time. Check out our step by step guide...
Step One: What type of business will you have?
Sole proprietorship: You have complete control over the business. This form of business has low start-up costs and few regulations, but you are personally responsible for any debts and obligations. If you operate under your own name you do not need to register, but if you earn more than $30,000 a year you will need to apply for a GST number.
Partnership: Each partner shares the obligations and profits. This requires a partner agreement.
Corporation: A legal entity. A corporation has higher costs and taxes and more regulations but shareholders have limited responsibility for debts and obligations.
Co-operatives: A corporation controlled by its members.
Step Two: Choose a Business Name
Deciding on a corporate name is not difficult, although it does have to meet certain requirements in order to be acceptable. Normally a search is made when you register to ensure that no other businesses have similar names in the state. You can also register as a numbered-name corporation, although most businesses will find a name useful.
A corporate name is usually made up of:
- A distinctive element
- Descriptive element
- Legal ending.
The distinctive element is the part of the name that makes it different from any other company, for example, in the name "Zebidiah Motors Ltd", Zebidiah is the distinctive element. This does not have to be a name, it can also be a coined word, a descriptive name (e.g. 'Quality', 'Budget'), a Geographic word (e.g. Sahara, Toronto), or a general name (e.g. 'General', 'Community').
The descriptive element of the name describes what the corporation does: e.g. "Electrics (as in Godwin's Electrics Ltd), while the legal ending is "Limited, Incorporated, Corporation" or abbreviations such as "Ltd, Inc. Corp."
You always need to include the distinctive name and a legal ending, however you do not necessarily need to include a descriptive element. So "DashFar Ltd" is an acceptable name.
If your company name uses common or popular names, the chance of it being accepted decrease. If the name is similar to, or the same as, another company in the same jurisdiction as you, then you may be prohibited from using that name.
There are several different name search options available, which will cost between $8-12 per search.
- Use the business names public record at the Companies Branch
- Search online through OnCorp Direct Inc.
- You can also get a NUANS report (New Upgraded Automated Name search), which is a Canada-wide corporate and business name registry. To search this you will need to contact a private service provider.
To register a business name you need the name and address of the business, a description of the business activity that will be performed, and your name and home address.
You can register your business name through the public office of Companies Branch in person or by mail. (Forms are available from the branch or at local Land Registry Offices). The fee for registering a business name by mail or in person at the Companies Branch is $80. You may also register your name at a Local Tax Service office.
Step Three: Choose whether you will incorporate provincially or federally.
Each province has different regulations and costs for registering a business so you will need to search for the name of your province plus register a business. Incorporating federally is a good idea if you wish to do business across the nation and/or wish to protect your company name Canada-wide.
Jurisdiction Current Government Incorporation Fees
- Federal $200
- Alberta $225
- British Columbia $352
- Manitoba $300
- New Brunswick $260
- Newfoundland $250
- Nova Scotia $390
- Ontario $360
- Prince Edward Island $260
- Quebec $300
- Saskatchewan $265
Step Four: Fill out the registration form
To incorporate in your province go to your local company office or website.
- British Columbia
- Nova Scotia
- Prince Edward Island
If incorporating federally, you may be able to do it online through the Corporations Canada Online Filing Center. You will need to register with Strategis Secure Server Facilities to be able to do this.
- Cost: $200
- Payment methods: American Express, Visa, Mastercard.
- Time: Same day service
- All business registration forms available here.
Step Five: Apply for your Business Number
A business number is used for tax purposes and as a business identifier. You may be able to apply for a business number at the same time as you register your business.
To apply for a business number you need:
- Full names and social insurance numbers (SIN) of all owners, directors, partners or officers
- Businesses physical & mailing address
Apply online for a business number here.