7 things you must know before registering a company: the first step to starting a business in Canada
Starting a business in Canada is an exciting decision, but many new immigrant entrepreneurs take detours due to unfamiliarity with local processes. This article outlines 7 key questions to clarify before registering a company, so you get the first step right.
1. Choose the Right Company Type
Common types of companies in Canada include:Sole Proprietorship— Simplest, but personal liability is unlimited;Partnership— Operated jointly by two or more people;Corporation (Limited Company)—a separate legal entity where shareholders have limited liability. For most businesses wanting a professional brand, incorporation is the first choice.
2. Federal vs. Provincial: Choosing the Right Registration Level
Federal corporations can operate nationwide with name protection across Canada; provincial corporations (e.g., Ontario corporations) have simpler procedures and lower costs. If your business is mainly in one province, provincial registration is sufficient; choose federal if you have cross-province expansion plans.
3. Prepare a business plan
Not all registrations require a business plan, but if you're planning to apply for loans or government grants, a clear business plan is essential. It should include: market analysis, revenue model, financial projections (at least 2 years), marketing strategy, and operational plan.
4. Apply for a Business Number and Tax Accounts
After incorporating, the CRA will automatically assign Business Number（BN）You also need to register based on business needs:GST/HST Account(Must register if annual revenue exceeds $30,000)Payroll Account(When There Are Employees),Import/Export Account(When Cross-Border Trade Is Involved).
5. Get a Business License
Depending on your city's specific requirements, you may need to apply Municipal Business LicenseCities like Toronto, Markham, and Richmond Hill each have their own licensing systems and fee schedules. Some industries (food service, beauty, construction) also require additional permits.
6. Open a Business Bank Account
Business and personal finances must be kept separate—opening a business bank account is the foundation of compliant operations. Canada's Big Five banks (RBC, TD, Scotiabank, BMO, CIBC) all offer small business account packages, typically with 6–12 months of free monthly fees for new companies.
7. Set Up Business Insurance
Depending on your industry and lease agreement requirements, you may need:Commercial General Liability (CGL) Insurance— Covers third-party injury and property damage;Professional liability insurance— Suitable for service industries like consulting and accounting;Commercial Property Insurance—Protect Inventory and Equipment.
These 7 steps may seem tedious, but professional organizations can help with each one. Instead of spending a lot of time figuring it out yourself, find a knowledgeable consultant to handle it all for you.