Planning to set up your Small Business in Canada? Checklist to follow
In case you are planning to start your own business in Canada, you should be aware of the fiscal obligations and their implications. We at The Accounting and Tax provide you with a list of things you must consider while starting your small business.
What are the points to check Before you start
As per the income tax laws in Canada, a business is defined as an activity where in you can have a reasonable expectation of profit. You must also have evidence to support that intention as well. However in terms of goods and services tax/ harmonized sales tax popularly known as GST and HST, might also include a business whether or not it is engaged in for profit. It also includes any regular and continuous activity that involves leasing property.
The structure of your business
Depending on the type of your business structure you choose to conduct your business will determine how you report your income to the tax authorities. It will also determine the types of returns you have to complete as well as other aspects of your overall business. The structure of your business may be a Sole Proprietorship, a Partnership, or even a Corporation.
Certain things to consider while starting your business
Apart from the structure of your business you also have to consider whether you are an employer – You must know and report if you have employees for your business. Along with this you also have to determine your employee’s’ employment status.
Registering your business is another step involved. You need to get your business registered and get a unique number for your business. This will help you and make it simple for you to deal with federal and provincial governments as well as municipal jurisdictions.
You may also need to add a CRA Program account to your business number (BN). This can be the GST/HST program Account, Payroll Program Account, import or export account, etc depending on your nature of the business.
Need for reporting the business income and expenses is another important step which needs to be done correctly through the appropriate statements.
Paying your income taxes after calculation of the same is another important step as well.
Along with the above mentioned steps, you may also register through “My business Account”. This will help you to deal with the CRA in a much secured environment. My business account is a very strong tool. Using this account you can file your GST/HST return, corporate tax return, payroll deductions and many other business related returns.
Other benefits of using my business account include following:
- View status of filed returns
- Check status of refunds
- Add or delete a bank account
- Register disputes online if any
- Calculate quarterly installments for corporate income tax
You must also ensure the correct and timely filing of business returns based on the nature of your business.
In conclusion, we hope that we have been able to provide you with some idea about the steps involved in regard to fulfilling your fiscal obligations as a small business owner. In case you need any help please get in touch with us. The Accounting and Tax are experts who have been providing professional tax, audit, and accounting solutions to individuals and corporate clients since 2001.
