What is a Sole Proprietorship business?
There are generally three types of businesses; a sole proprietorship is one business organization in which only one person will own and run the whole company. A sole proprietorship business is a very straightforward business in Canada as in this business, you will be the only owner, and complete authority of the business is under you. All the profits will be yours, and you will have decision-making power in your company. If you start a Sole proprietorship business in Canada, then it will be a thrilling venture for potential business people.
Benefits of Sole Proprietorship Registration in Canada
If you choose to start your sole proprietorship registration in Canada, then there will be many benefits to you, some of which are mentioned below
- Less Startup Cost – The best and most attractive advantage is that the starting cost is minimal. Also, there will be no confusing legal requirements or fees for registration, which gives aspiring entrepreneurs an accessible option with limited Capital.
- Full control of the business- As the sole proprietor, you will not need a partner or shareholders to share decision-making power.
- Easy Tax Reporting- The taxation policy will be comparatively straightforward for sole proprietors. In your tax return, you must disclose your company's earnings and expenditures, simplifying your tax process.
- Flexibility – As sole proprietor, you will possess the freedom to adapt and hinge your companies quickly. This feature is invaluable when it comes to responding to the changing market conditions.
Documents for Sole Proprietorship Registration in Canada
If you want to do a sole proprietorship registration in Canada, you need to understand the rules and regulations required to mark the start of your business. The documents needed in the whole process are mentioned below
- Incorporation certificate
- You choose a federal corporation or a provincial corporation. For that, you will need an Article of Incorporation, which is also known as Form 3001
- You will need the Registered office of your organization and Information on the first Board of directors that is also known as Form 3002
- Article of Association and Memorandum
- NUANS name search report
- Canadian corporation approval letter
- Use the federal business number with the income tax number to complete business transactions.
- Registered office address
- Some Additional documents required are
- Address proof
- Copy of the Passport
- Information on paid Capital to form business
- Form filling payment
Procedure of Sole Proprietorship Registration in Canada
Step 1- Pick your Business Structure
As a business owner, your first step should be to choose a business structure that will suit your needs. As you already know, a sole proprietorship business is the easiest, is owned by one person, and is also the least expensive.
Step 2- Create your business name
For sole proprietorship registration in Canada, after choosing a proper business structure, you must give your business a name, especially if it provides goods or services to the public. A good business name will have to describe your business activity, and it should be distinctive, which helps your business to differentiate from others. Over time, whatever name you choose for your business will also become a valuable asset and will be recognized with customer loyalty and goodwill.
Step 3- Check the availability of your business name
For sole Proprietorship registration in Canada, you cannot register your business name until and unless you ensure that you have the legal right to use that name for your business. You can do this by doing a name search. The least expensive search will be where you perform yourself by checking through public information sources that are phone directories or computerized online directories.
The name availability or probable domain names can also be searched by doing a free WHOIS domain search.
Step 4- Register your Business Name
In the process of Sole proprietorship registration in Canada, this step is the legal one in which all businesses except those located in the province of Newfoundland and Labrador have to register their business names with the province in which they plan to operate. The one exception to this requirement is if the personal name is used as the name of your sole proprietorship business. The point to notice is that if anything else is added, even an extra word, your name will become a business name, and you have to register your business name.
Whenever you open a business bank account, You will need proof of business name registration also to be sure that you are not using someone else business name, as then you would have to change your name if it turns out to be the same in the future so you should register your business name.
For registration, you will have to contact your provincial government, fill out the form, and pay a small fee.
Step 5- Register For permits, licenses and Taxes
You may be required to register for a Business number in Canada with the Canada Revenue Agency (CRA) for tax purposes like GST OR Harmonized Sales Tax (HST).
Whether any business operates from a commercial office or a private home, you must comply with the Federal, provincial, and municipal business laws and regulations and collect and pay appropriate taxes.&
In Municipal law, you will have to obtain a business license.You also have to enquire about municipal bylaws that can affect your operations, like certain prohibitions against excessive courier deliveries to certain residential areas, etc., and professional licensing.
Step 6- Business Banking and Finances
It is very important to keep your personal and business accounts separate for a sole proprietorship, and for that, you have to:
Open a business account You should open a business account to handle all your business transactions, which will make keeping accurate financial Information and tracking revenue and expenditures simpler.
Step 7- Record-keeping and Accounting
For a sole proprietorship registration in Canada, you will have to do accurate record-keeping, and here is how you will do it
Track all Financial Transactions
You must keep detailed business records of all your income and expenses, covering bills, acknowledgements, and financial statements.
Start using accounting software
Accounting software will simplify your financial management.
Regularly Reconcile accounts
You should compare the accounting documents and bank statements to verify the accuracy.
Step 8- Hire Employees
You have to plan to hire employees and also expand your sole proprietorship. For that, you should understand some essentials
- Employee deductions- As an employer, you will have to withhold and remit income tax, CPP contributions, and employment insurance premiums.
- Employment Standards- Acquaint yourself with employment standards that will govern issues like wages, working hours, employee rights, etc.
It is difficult to set up a business because each country has its own rules and regulations. Nevertheless, Canada imposes a set of easy procedures for becoming a sole proprietor. It also provides a safe place to do business without discrimination or attack. If you are not a resident of Canada and still intend to start your business, legal benefits shall also be offered. For more details, contact Enterslice.
What Services Enterslice can provide?
- Enterslice offers you expert guidance and assistance throughout the process of sole proprietorship registration in Canada.
- We at Enterslice will help you conduct the name search to ensure you are available and comply with Canadian regulations for sole proprietorship registration in Canada.
- Enterslice will assist you in preparing and filing all necessary documents required for sole proprietorship registration in Canada, which will include articles of incorporation and licenses.
- Our team at Enterslice ensures that your sole proprietorship registration in Canada has complied with all Canada's legal requirements and regulations.
- Enterslice also helps businesses register for taxation purposes, ensuring that your sole proprietorship meets all the tax obligations in Canada.
- Enterslice provides personal advice on choosing the right business structure for your sole proprietorship.