Business Regulatory Requirements
An introduction to the licences, taxes and regulations you need to be aware of when starting a business in Canada...
All businesses are required to pay for an annual business licence from the town or city where the business is located. Contact the licences department of the local town hall or city hall.
Trade or professional licence
Many trades and professions require registration or a licence as a practitioner before being legally qualified to practice. Examples are hairdressers, car dealers, real estate agents, psychologists, lawyers, accountants, dentists and doctors.
Most businesses are required to collect sales tax on goods and services sold, and remit the taxes to the federal government's Canada Revenue Agency (CRA).
Businesses that employ people on payroll are required to set up accounts with:
- Canada Revenue Agency (CRA) for deducting and remitting income tax
- Canada Pension Plan (CPP) for making and remitting deductions
- Employment Insurance (EI) for deducting and remitting EI premiums
- Workers Compensation Board for deducting and remitting WCB contributions
A Business Number (BN) is a federally-assigned, nine-digit business identifier used in Canada to simplify dealing with the federal government. Businesses in British Columbia only need a Business Number if registering for any of the following programme accounts:
- Corporate income tax
- Certain other purposes
To obtain a Business Number, submit a BN Form 1 (Request for Your Business Number). The BN number should be used when communicating with any federal government department, such as the CRA, and many provincial government departments, concerning programme accounts which require registration.
Zoning and bylaws
Zoning regulations and bylaws passed by local town and city councils restrict the types of business that can be carried out in each area of the community. If renting or buying commercial premises, check with the town or city hall to determine whether the property is located in a zone in which the type of business is allowed. If intending to run a business from home, check what types of business are permitted in the residential zone where the home is located. If living in a condominium residential development, the strata council of the condominium may have their own restrictions, so the strata corporation by-laws should also be checked.
Renovations to commercial and residential premises often require a building permit from the local municipal authority.
Local municipal authorities assess property owners for local property taxes. Owners of commercial properties usually include a clause in the lease passing on part of the building's property tax assessment to tenants.
Examples of other regulations that may apply to certain types of businesses are labelling requirements, door-to-door sales rules and local authority health and safety regulations.