The following questions are some of the most important questions that you should be able to answer if you are in this phase of development. In answering these questions, you will be better equipped to make the necessary decisions to begin the entrepreneurial process.
What government financing is available?
There are many government financing programs for businesses, generally targeted to specific industries, geographical areas or particular groups of entrepreneurs. Almost all financing programs consist of loans. There are very few grants available. However, they do exist for the arts/culture industry. One of the more common financing programs is Canada Small Business Financing (CSBF), a loan that is guaranteed by the Government of Canada in the event of a default on the loan.
There is an extensive list of government financing programs for business at the Canada-Ontario Business Service Centre (COBSC) Web site which may be of help. See also the Sources of Financing database at Industry Canada’s “Strategis” Web site.
What is a business number (BN)?
A Business Number relates to a business as a Social Insurance Number (SIN) relates to an individual. CCRA issues this nine-digit number when you register for any the of 4 CCRA accounts:
payroll deductions (income tax, Canada Pension Plan, Employment Insurance)
corporate income tax
This number is designed to simplify and streamline interaction with CCRA. Related information is available at the Canada-Ontario Business Service Centre Web site.
PS: A Business Number (BN) is not to be confused with a Business Identification Number (BIN). If you register your business name, you will receive a Business Identification Number as part of your Master Business Licence from the Ontario Ministry of Consumer and Business Services (see “How do I legally register a business?“).
How do I legally “register” a business?
“Registering” a business most often refers to registering the name of a business. In Ontario, it is a legal requirement to register your business name if you are operating a sole proprietorship (1 owner) or partnership (more than 1 owner) under a business name other than your exact legal name.
There are 4 ways to register your business name:
i) from the Internet via the Ontario Ministry of Government Services:
Registration requires Netscape Communicator 4.08 or higher, or Internet Explorer 4.0 or higher. Immediate registration (you can print off from your computer) if done between the hours of operation 8:30am to 6:00pm Monday to Friday, for a fee of $60.00 payable by credit card (Visa, Mastercard or American Express). If registration is completed during regular business hours a Master Business License is printed off from your computer right away followed by an electronic saveable copy which can then be printed off when needed) within 2 business days if a valid email address is provided. If no email address is provided a copy will be mailed to you within 10 business days. If done outside the hours of operation or on statutory holidays or Remembrance Day, allow up to 2 weeks for delivery of the Master Business License.
A name search can also be done online for a fee of $8.00.
ii) from the Internet via the Canada Customs and Revenue Agency:
Registration requires Netscape Communicator 4.x or higher (but not 6.0), or Internet Explorer version 4.x or higher (version 5.5 may require a service pack). Registration takes about 30 minutes and costs $60 (payment by credit card only). Name searches are not available with this method of registration.
As well as registering or renewing a business name, you can also from this site register for:
Ontario Retail Sales Tax
Ontario Employer Health Tax
Ontario Workplace Safety and Insurance Board
iii) In Person – Service Ontario Counter
For a list of Service Centres in Ottawa where you can register a business name in person: https://www.services.gov.on.ca/services/searchServices.do?action=service_details&id=11595&last_category_id=0&last_sub_category_id=1&locale=EN Registering at a workstation takes about 30 minutes and costs $60. Searches of sole proprietorship, general partnership and corporate trade style names are available at the workstations for $8 per name.
iv) by mail
Mail registration requires “Form 1″ (Registration under the Business names Act – Sole Proprietorship/Partnership), takes 2-4 weeks and costs $80. This form is available at the Service Ontario in City Hall or online at: http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?OpenForm&ACT=RDR&TAB=PROFILE&ENV=WWE&NO=007-07219
Registering a business name does not give you exclusive rights to the use of the name. You can conduct a name search of existing sole proprietorships and partnerships in Ontario, however this name search is optional as sole proprietorship and partnership names are not protected. You can conduct name searches at an OBC computer ($8 per name) or by mail ($12 per name). (To protect a business name you must incorporate or apply for a trademark.)
Incorporation is another way to register a business. If you want to operate your business as a corporation (a separate legal entity), you must incorporate your business. You can incorporate provincially or federally.
If you wish to name your corporation you must first conduct a NUANS® name search to verify if the name is available, because corporate names are protected.
NUANS® is a computerized search system that compares a proposed corporate name or trade-mark with databases of existing corporate bodies and trade-marks. This comparison determines the similarity that exists between the proposed name or mark and existing names in the database, and produces a listing of names that are found to be most similar.
To obtain a NUANS® report, you have the option of ordering your own NUANS® report in real-time from the NUANS “Do it yourself” Real-Time System (RTS) for federal incorporations only, or you may elect the assistance of a registered Nuans Name Search house http://www.nuans.com/houses-maisons/sh_form-forme_mr_en.cgi of your choice to incorporate federally and to incorporate in other jurisdictions.
Provincial incorporation costs $360 plus the cost of forms available from the government website: http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/FormDetail?OpenForm&ACT=RDR&TAB=PROFILE&SRCH=&ENV=WWE&TIT=business+incorporation&NO=007-07116. The forms can be filed at Service Ontario located in City Hall, 110 Laurier Ave. W. You can also incorporate on-line through www.oncorp.com or www.cyberbahn.ca The cost for on-line filing is $300, plus the service provider’s fee. Payment can be made by credit card or by setting up an account.
Federal incorporation costs $250 if filing in person at Industry Canada’s Corporations Directorate or $200 if filing via the Internet from the Corporations Directorate Electronic Filing Centre at http://www.corporations.ic.gc.ca . More related information is available in the Corporations Directorate’s Small Business Guide to Federal Incorporation.
If you don’t know whether to operate as a sole proprietorship/partnership or a corporation, consult a lawyer and an accountant as each operating structure has different legal and tax implications. The Entrepreneurship Centre offers 30-minute legal consultations and accounting consultations for a $25 administration fee. For more information on business structure and name registration please consult http://www.canadabusiness.ca/eng/125/.
Can I “write-off” my business expenses?
You can generally deduct business expenses if you incur them for the purpose of producing income. If you claim expenses, you have to be able to back up your claim. You do this by keeping all your business-related vouchers and receipts, and recording all your expenses in a journal.
Examples of expenses you can deduct include: accounting and legal fees, advertising expenses, fees, licences, and dues, interest and bank charges, meals and entertainment, maintenance and repairs, vehicle expenses, use of a workplace in your home and inventory and costs of goods sold. Typically a percentage of an expense is claimable.
For more information see Canada Revenue Agency (CRA)’s income tax guide entitled “Business and Professional Income”. Copies are available at CRA’s office or their web site http://www.cra-arc.gc.ca/E/pub/tg/t4002/README.html.
What kind of insurance should I get for my business?
If you are running a business from home, your home/tenant insurance may not cover the portion or percentage of your residence which you use for business. Consult your insurance agent or broker.
There are several types of insurance for business. Loss of physical assets, liability to third party, business interruption and loss or sickness of key people are all situations against which you may want to insure yourself. You may wish to take advantage of the centre’s seminars on a variety of topics, including liability insurance: http://entrepreneurship.investottawa.ca/seminars-and-events/. You should enquire with different insurance companies or speak with an insurance broker about your particular needs. Also many trade and networking associations offer group insurance plans to their membership. You may wish to visit the following website for a number of articles on business insurance: http://www.canadabusiness.ca/eng/search/results/search&keywords=business%20insurance/
Do I need a licence for my business?
To ensure your business complies with Ottawa’s by-laws, visit the business licencing section of the City of Ottawa Web site at http://ottawa.ca/residents/bylaw/a_z/business/schedules/index_en.html.
You can also use a new feature on the City of Ottawa website called BizPaL, an online service for entrepreneurs that simplifies the process of finding information on business permits and licences from all levels of government.
Alternatively, you can call the City Licencing department at 613 580-2424, ext. 41596 or visit a licensing office at:
Franklin Client Service Centre
101 Centrepointe Dr., 3rd Floor
Nepean, ON K2G 5K7
You will receive a Master Business License from the Ontario Ministry of Consumer and Business Services if you register your business name (see Q1).
Certain business activities require a permit/license. Permits/licences are granted in most cases by government (federal, provincial or municipal).
To verify if you require a permit/licence for your business contact the Canada-Ontario Business Service Centre at (800) 567-2345, visit their web site at the following URL: http://www.canadabusiness.ca/eng/ , or enquire with staff at the Entrepreneurship Centre.