Starting a business is an exciting venture, and for entrepreneurs looking to expand their operations globally, Canada offers a great opportunity. One of the first essential steps in setting up your business in Canada is obtaining a Business Number (BN). The BN is a unique identifier assigned by the Canada Revenue Agency (CRA) to businesses and is required for various types of company registration in Canada. This guide will walk you through everything you need to know about obtaining a Business Number, including its importance, the process of company registration in Canada, and the costs involved.
What is a Business Number (BN)?
A Business Number (BN) is a unique 9-digit identifier assigned to your business by the Canada Revenue Agency (CRA). It is used by the CRA and other government entities to identify your business for taxation and other business-related purposes. The BN is crucial for various registrations, such as the Goods and Services Tax (GST) or Harmonized Sales Tax (HST), payroll deductions, and corporate income tax.
When you register your company in Canada, the BN is the key to handling these government responsibilities. It’s also a requirement for businesses that plan to hire employees or operate in certain regulated industries.
Why is Obtaining a BN Important?
For entrepreneurs looking to establish a business in Canada, registering for a BN is one of the first steps. Without a BN, you cannot properly register for taxes, file returns, or deal with the CRA. Having a Business Number allows your business to:
- Register for Taxes: Whether you are required to charge GST/HST or deduct payroll taxes, you need a BN to register for these programs.
- Open a Business Bank Account: Financial institutions often require a BN for opening a business account.
- Interact with Government: For submitting forms, paying taxes, and other official interactions, a BN is essential.
- Ensure Legal Compliance: With a BN, your business is recognized by the government, ensuring compliance with Canadian laws and regulations.
Steps to Obtain a Business Number (BN) in Canada
The process of obtaining a Business Number is relatively straightforward, but there are some steps you need to follow to ensure everything is done correctly. Here is a step-by-step guide to help you with company registration in Canada.
Step 1: Determine Your Business Structure
Before you can obtain a Business Number, you need to determine your business structure. The structure you choose will impact your business’s legal requirements, including registration. The most common business structures in Canada include:
- Sole Proprietorship: A business owned and operated by one individual.
- Partnership: A business owned by two or more individuals who share profits and liabilities.
- Corporation: A separate legal entity that is owned by shareholders and can offer limited liability protection.
Each structure has its own registration requirements, so it’s important to decide on the right one for your business before proceeding.
Step 2: Register Your Business
Once you’ve determined your business structure, you’ll need to officially register your business with the appropriate provincial or territorial authorities. This is typically done through your province’s business registry.
For company registration in Canada, if you’re setting up a corporation, you will register federally or provincially, depending on where you plan to operate. Federal registration gives you the right to do business across Canada, while provincial registration limits your operation to that province.
For a sole proprietorship or partnership, registration requirements may vary by province. In many cases, you may be able to register your business name online through the provincial business registry. Be sure to check the requirements for business registration in Canada for your specific province.
Step 3: Apply for a Business Number (BN)
After completing your business registration, you can apply for your Business Number (BN). This can be done online through the Canada Revenue Agency (CRA) website or by phone, mail, or fax.
- Online: The most efficient method for obtaining a BN is through the CRA’s online portal. You’ll need to provide information such as your business name, business structure, and your contact details.
- Phone: You can call the CRA at 1-800-959-5525 to apply over the phone.
- Mail/Fax: You can complete the BN application form and send it to the CRA by mail or fax. This method may take longer to process.
Once your application is submitted, the CRA will assign you a Business Number. This number will be issued along with the tax accounts you’ve registered for, such as GST/HST or payroll deductions, if applicable.
Step 4: Register for Other Accounts (If Necessary)
Depending on your business activities, you may need to register for additional accounts. For example, if you are required to charge GST/HST, you will need to register for this tax. If you plan to hire employees, you will need to set up a payroll account. These additional accounts are linked to your BN, making it easier to manage your business’s tax obligations.
What are the Costs of Company Registration in Canada?
The cost of company registration in Canada can vary depending on your business structure and the province in which you are registering. Here’s a breakdown of potential costs you may encounter:
- Sole Proprietorship: Typically, the cost of business registration for a sole proprietorship is lower. You may pay between $60 to $100 depending on your province.
- Partnership: Costs for partnership registration are usually similar to sole proprietorships.
- Corporation: Registering a corporation is more expensive, typically ranging from $200 to $400 or more, depending on whether you choose federal or provincial registration.
Additional costs may include obtaining business licenses, permits, and other regulatory fees, which can vary based on the nature of your business and location. Company registration in Canada cost can also include accounting or legal fees if you require professional assistance in setting up your business.
Conclusion
Obtaining a Business Number (BN) is an essential step for entrepreneurs looking to start or expand their business in Canada. By following the outlined process of company registration in Canada, you can ensure that your business is properly recognized by the CRA and compliant with Canadian tax laws. Whether you are registering a sole proprietorship, partnership, or corporation, obtaining a BN is crucial for managing taxes, hiring employees, and interacting with the government.
With the right knowledge and guidance, you can navigate the business registration process smoothly and take advantage of Canada’s favorable business environment.
Frequently Asked Questions (FAQs)
Do I need a Business Number if I’m a sole proprietor in Canada?
Yes, even if you’re a sole proprietor, you will need a Business Number if you plan to register for taxes like GST/HST or if you have employees. It’s also required for opening a business bank account.
Can I apply for a Business Number online?
Yes, the most efficient way to apply for a Business Number is online through the Canada Revenue Agency’s website. You can also apply by phone or mail.
How long does it take to get a Business Number in Canada?
The process can take anywhere from a few days to a couple of weeks, depending on the method you choose to apply. Online applications tend to be processed faster than mail or fax applications.