- Registration of your Sole Proprietorship or Partnership costs about $60.
You simply register your business with your local provincial business registration office and you are done.
This just registers your business name with the government and lets you obtain GST and PST numbers, vendor permits and similar licences.
While it helps prove that you have registered a business name, it does not prevent others from using the same name.
Registering your sole proprietorship or partnership type business gives you no protection to speak of, but it is fast, easy and cheap.
The Basic Steps to Incorporating your Business
- Select Corporate Jurisdiction: Generally this will be your home province.
- Create a name for your company.
- See if your company name is available using NUANS: NUANS keeps a database of all registered company names. You order a search to see if your proposed name is taken. If not, you may register it for your company
- Prepare the Articles of Incorporation
- Submit & Register Articles of Incorporation
- Obtain permits & licenses eg Sales taxes and vendors permits: Note that if your sales will be under $30,000
( see CRA Small Supplier Sales Limits for official rules)
you do not need to register for, collect or pay GST on your sales.
- Optional: Purchase Corporate Seal & Minute Book: For a small business these items look pretty on your bookshelf, but really do nothing.
- Complete Corporate By-Laws, See Corporate By-Laws Organizational Minutes & Issue Shares:
- Set Up Bank Account
- You are done. Start Your Business!
Incorporation: Incorporating a small business will cost about $600 or so and offers better name protection to the owner.
There are two types of Incorporations: Federal and Provincial. For most small businesses, a provincial incorporation is all you need.
Customers and suppliers will also expect or require you to have a "real" business before they will deal with you.
We are only concerned here with the kind of corporation which an individual or a few associates may set up. You and or your associates will not sell shares to the public. You will be operating what is generally described as a "private" corporation
The biggest benefit to incorporating is income tax savings.
You can also deduct many expenses and split income to get a lower tax rate.
It used to be incorporating protected the owner from the debts of the corporation. Today all lenders require the borrower to take personal responsibility for the loan regardless of the fact that the corporation is borrowing the money.
The CRA and other government agencies also require a lot of paperwork from the corporation.
But corporations look better, (professional, serious) to customers and suppliers.
On balance, if you can afford it, incorporate your business in your own home province.
Despite some negatives, it probably is the better option and you will feel better having an INC or LTD after your company name.