Have you left your job to go solo and create your own business? Do you have a hobby that has grown into a business opportunity that can supplement your income? If you are starting a business, registering it is a small step that can help you reap the rewards.
Below are five smart reasons to register your small business:
1. Establish an identity
Registering your company name helps you start creating a brand identity. When you register your business name you can check whether the name you want to use is unique and not similar to an existing company name or trademark.
2. The tax man (collecting GST/HST)
As a small business in Canada, you may need to charge GST/HST on the products or services you provide.
If you expect your revenue will top $30,000 a year, you will need to register for a GST/HST account, which requires you to have registered your business. The amount of tax charged depends on the province in which your business operates. If you think you are a small provider but your sales exceed expectations, that’s great news! You will need to register for a GST/HST account and charge the tax on the sale that puts you over the $30,000 threshold.
Check out our guide to learn more about GST/HST returns for small businesses.
3. Show me the money!
Your business might need: the right business bank account to accept payments, pay suppliers, and keep your business income separate from your personal accounts; a business credit card to charge expenses; or a loan to expand. When applying for financial services for your business you will need proof that you are operating a viable business (among other things). The business number that you get when you register can be that proof.
4. Establish credibility with customers and suppliers
Customers want to deal with established businesses. They are becoming increasingly savvy and doing their homework, researching companies before purchasing their products or services. Registering your company establishes a start date to show how long you have been running a legitimate business.
5. Grow your empire
When your business grows, you may need to hire employees, and to do so you will need to have a registered business. This allows you to establish payroll and open an account with the Canada Revenue Agency (CRA) for payroll deductions, set up Workers Compensation, health benefits and more. The Canadian Federation of Independent Businesses (CFIB) has more information on the steps to take when hiring your first employee.
How should I register my business?
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.