However, in many cases, such as home-based businesses, business licensing is not enforced. But if your business opens an office or performs functions that will disrupt residential neighbours, it will likely have to do so in a designated area, and will therefore require a municipal business licence.
Environmental and zoning permits
You need a federal and provincial permit for most businesses that affect the physical environment or that work with hazardous materials. All operators of new businesses must understand their area of business well enough to recognize what permits are required.
Some municipalities require zoning and building permits for certain kinds of businesses. Certainly this would be true for any kind of building or construction. You may also need permits for signs and access.
Federal business registration
Businesses earning less than $30,000 annually usually do not have to register for GST/HST and probably don’t need to register with the federal government. However, businesses of a certain size, businesses with employees and businesses engaged in certain activities do have to register with the federal Canada Revenue Agency (CRA) for the following programs:
- The Goods and Services Tax (GST) or Harmonized Sales Tax (HST)
- Payroll taxes, such as Canada Pension Plan contributions
- Corporate income tax
- Duties for the import or export of goods
- Registered charity work
- Excise duties
- Insurance premium tax
- Air travelers security charge
To register for any federal government program, a business must first get a Business Number from the CRA.
Registering your name
Many sole proprietorship and partnership businesses voluntarily register with their provincial government to provide some limited protection to their business name and to give their business more credibility.
Registration carries no legal requirements or tax implications. It is done through a government agent or online in the operator's local community. Usually, before a business can be registered, the agent will perform a name search to ensure there is no conflict with an existing business.
When companies incorporate, they are given a government charter to operate, so these functions are automatically performed.
In a number of provinces, businesses must also register for provincial tax regimes. Alberta and the territories have no sales tax, other provinces have harmonized their sales tax with the federal government’s while others have maintained their independent provincial sales tax. It’s up to the business owner to determine which regime applies to his or her company.
There are other regulations concerning which businesses have to register with their provincial or territorial government depending on where you live, including at what income level you must begin collecting provincial sales tax. You can visit the Canada Business Network site for additional information on registration across Canada.