As a citizen or resident in NA, you have probably been asking yourself the question about what are the benefits of a sole proprietorship in Canada. Economically, Canada is a country to blossom especially in the line of business, more as a sole owner. As a business owner, you own all assets, earnings, and profits. However, you also hold all the responsibilities (including legal and debt), obligations and liabilities.
If you establish a business in your own name, without adding any other words, you don’t have to register the business. You can either bill customers in your name, or register a business name and bill customers under that name, which must have a separate bank account. The law doesn’t distinguish between the business and its owner, and personal income tax must be paid on all revenue generated by your business.
If your revenues are more than $30,000, or if you have legal ownership of more than one business, you must register for GST/HST (one registration will cover all businesses). This is because you might need to obtain a business number (depending on the industry) with the federal government and be required to pay sales taxes.
You will also need to register a business number if your business pays employees or wants to benefit from government programs. Depending on your activities, you may also need permits and licenses from the federal, provincial, territorial or municipal government.
Canada’s various governments have created the BizPal platform to help entrepreneurs determine what permits and licenses they need to operate their business.
What Benefits Canada Promises
However, there are a number of benefits to be got from running a business of your own in Canada. Below are some of the answers you may need to reply to what are the benefits of a sole proprietorship in Canada?
- Affordability
A sole proprietorship is a flexible choice. Simple and less documentation helps you stay compliant with employment and taxation laws.
- Flexibility
You can join other businesses if your sole proprietorship business is small. Business policies are easy to change without the hassles of time and money. Minimal consent is required during such processes, making the company flexible and full of freedom.
Read Also: 10 Advantages and Disadvantages of Sole Proprietorship
- Ease
Simplified banking refers to easy payments which benefit a business. Business payments can be made directly through your bank account as a sole proprietor, and cheques are also easily retrievable.
- Uncomplicated Tax Reporting
Simple tax reporting services are one of the primary advantages of a sole proprietor. Separate taxes for businesses are also not required for such companies.
What to Get for Business Registration in Canada
These documents you may need to have your business registered in Canada are:
- Certificate of incorporation
- Articles of Incorporation for a Federal Corporation or a Provincial Territory in Canada/ Also known as Form 3001
- Registered Office of the Business and Information on first Board of Directors/ Form 3002
- Memorandum and Articles of Association of the Company
- Nuans Name Search Report
- Approval letter by the Canadian Corporation
- Federal Business Number along with Income Tax Number to complete corporate transactions
- Registered Office Address for running the business
Additional documents required from foreigners are as follows:-
- Address Proof
- Copy of the Passport (Visa)
- Information on Paid Up Capital to form a business
- Form filling payment
