Opening a Sole Proprietorship in Canada: A Comprehensive Guide

Starting a business can be an exciting venture, and choosing the right structure for your business is crucial. A sole proprietorship is one of the simplest and most common business structures in Canada, ideal for individual entrepreneurs looking to run a business on their own. This guide will walk you through the essential steps to open a sole proprietorship in Canada, ensuring you’re well-prepared to manage your new venture effectively.

Register the Business Name:

• If your business name is or will be different from your personal name, you need to register it.
• In Ontario, you can register online through the Ontario Business Registry. For other provinces, check their respective business registry websites.

Obtain a Business Number (BN):

• You need a Business Number (BN) from the Canada Revenue Agency (CRA) for tax purposes.
• Register online through the CRA’s Business Registration Online (BRO).

Register for GST/HST:

• If your business’s annual revenue exceeds $30,000, you must register for Goods and Services Tax (GST) or Harmonized Sales Tax (HST).
• You can register during the BN registration process or separately through the CRA’s My Business Account.

Obtain Necessary Permits and Licenses:

• Check with your municipal or provincial authorities to find out if you need specific permits or licenses.
• For Toronto, consult the Municipal Licensing and Standards page.
• For other municipalities, check BizPal.

Open a Business Bank Account:

• Open a separate business bank account to manage your business finances.

Set Up Accounting and Record-Keeping:

• Implement an accounting system to track income and expenses.

Consult Professionals:

• Consider seeking advice from a lawyer and an accountant to ensure all legal and financial aspects are covered.

Starting a sole proprietorship in Canada is a straightforward process that allows you to manage and grow your business independently. By following the steps outlined in this guide, you can ensure that your new business is set up correctly and ready for success. Whether you're launching a new venture or transitioning from another business structure, these steps will help you navigate the process smoothly. If you have any questions or need further assistance, feel free to schedule a free call with us.