Important Steps in Starting a Business

Are you interested in starting a business? The following steps will help you get started.

Summary

1. Select a Business Structure

The four main types recognized in Canadian law are: sole proprietorship, partnership, limited company (corporation), and business cooperative. Each business form or structure allows and requires different things.

For more information on business structures, their advantages and disadvantages, see the document Forms of Business Organization.

2. Prepare a Business Plan

Most business experts will say that the most crucial step in setting up a business is the planning stage. Unfortunately, this step often gets little attention or is skipped completely, leading to disastrous outcomes, such as the failure of the business, loss of investment, or loss of personal assets. This is why planning is so important. Anyone applying for financial assistance will need a business plan.

For more information on business plans, see the document Business Plan Guide, you can also use the Interactive Business Planner - IBP, a computer software program that uses the capabilities of the Internet to assist you in preparing a 3-year business plan for a new or existing business.

3. Register your Business Name

No matter what form of ownership you choose (sole proprietorship, partnership, corporation or business cooperative for your business), you must register the name of your business with the Registry of Joint Stock Companies unless your business name is just your first and last name. When you register your business name you are ensuring that no one else is carrying on business under that name.

For more information, please contact:
Registry of Joint Stock Companies
Phone: 1-800-670-4357
Web site : http://www.gov.ns.ca/snsmr/rjsc/forms.stm.

4. Register with Canada Revenue Agency

You will need a Business Number (BN) from Canada Revenue Agency (CRA) for the following reasons:

• To file your annual tax return if your business is incorporated
• If you are importing or exporting goods to and from Canada
• To remit payroll deductions (Income Tax, EI, CPP) for your employees
• To collect and remit GST/HST.

Saving you a step...

When you register with the Registry of Joint Stock Companies, you will also be assigned a Business Number (BN) from CRA. This number is a common identifier for many businesses. The Registry gets your BN automatically from Canada Revenue Agency (CRA, formerly Revenue Canada) who assigns it. Service Nova Scotia and Municipal Relations and the Workers' Compensation Board of Nova Scotia both use BNs now.

For more information, please contact:
Canada Revenue Agency Business Window
Phone: 1-800-959-5525
Web site: http://www.cra.gc.ca/menu-e.html.

HST Number

You must register for and charge HST if:

• you sell or provide taxable goods or services in your commercial activities in Canada and your total taxable revenues were more than $30,000 in the immediately preceding four consecutive calendar quarters, or exceed $30,000 in a single calendar quarter.

If your sales do not exceed $30,000 in four consecutive calendar quarters, you do not need to register, nor charge HST.

If you wish to register for the HST, you need a Business Number (BN). If you have recently registered your company name at the Registry of Joint Stock Companies, you will already have a BN. If not, contact the Canada Revenue Agency Business Window and explain that you want to register for the HST. You will be provided with a Business Number application form, or you may register over the telephone.

For more information, please contact:
Canada Revenue Agency Business Window
Phone: 1 800 959-5525
Web site: http://www.cra.gc.ca/menu-e.html.

5. Register for Business Occupancy Tax

If you are a tenant or property owner who occupies or uses commercial space, or operates a home-based business, you will be assessed for business occupancy tax. There are 55 municipal units in Nova Scotia, each with its own individual tax rate. Businesses in each municipality pay a Business Occupancy Tax based on an assessment made by Service Nova Scotia and Municipal Relations.

For the assessment office closest to you, please consult the blue pages of your telephone book under "Property Assessment", "Property Information" or "Assessment" or see the document Business Occupancy Assessments.

6. Check Zoning Regulations

Contact your municipal government concerning zoning requirements or special licenses or permits.

To find the contact in your municipality, call Service Nova Scotia and Municipal Relations at (902) 424-5200 or toll-free 1-800-670-4357, visit the web site at: http://www.gov.ns.ca/snsmr

7. Set-up Business Insurance

Your business may have many assets - vehicles, an office and equipment, inventory, an indispensable employee or partner and most importantly, yourself. To ensure your business is as free from risk as possible, business insurance is necessary. A wide variety of insurance products are available. These include the standard insurance policies covering fire, theft, or vandalism, which can offset a potentially serious loss of buildings, equipment or inventories. It is likely that a lending institution will insist that adequate property insurance be carried as a condition for a loan. Also, life insurance is often carried on a key individual(s) in an organization to minimize the impact of the absence of that individual(s).

For more information consult your insurance professional and see the document Business Insurance or call the Canada/Nova Scotia Business Service Centre at 1-800-668-1010 for a copy.

8. Open a business account with your bank under your company's name

Open a current account with your bank, or lender, under the registered name. It's important to discuss your new business with them, and to establish a line of credit.

9. Set-up a Bookkeeping System

Keeping good records are essential and can be a benefit for the following reasons:

1. Good records can help you identify the sources of your income.
2. Well-kept records can mean tax savings.
3. Well-kept records can prevent most of the problems you might encounter if your income tax is audited or you have GST/HST returns.
4. Records will keep you better informed about the financial position of your business.
5. Proper books and records may help you get loans from banks and other creditors.

A bookkeeper or an accountant can help you set up your records, or you can find out more through the "Guide for Canadian Small Businesses" available on the Internet at: http://www.cra-arc.gc.ca/E/pub/tg/rc4070/ or call 1 800 959-5525.

10. Hire Employees

When hiring employees you have to address a variety of issues, such as payroll deductions, laws and regulations, occupational health and safety and human rights. The following organizations will be able to help you:

Canada Revenue Agency for payroll deductions information - 1 800 959-5525 or http://www.cra.gc.ca/menu-e.html.

Workers' Compensation Board of Nova Scotia, if hiring more than 3 employees - Toll Free in Mainland NS 1 800 870-3331 or http://www.wcb.ns.ca

Nova Scotia Department of Environment & Labour - Labour Standards Office for information on minimum wage rates, hours of work, overtime & vacation pay - 1-888-315-0110 or http://www.gov.ns.ca/enla/

Occupational Health & Safety office for health & safety requirements - 1 800 952-2687 or http://www.gov.ns.ca/enla/ohs

Nova Scotia Human Rights Commission for a Human Rights Guide- (902) 424-4111 or http://www.gov.ns.ca/humanrights

See the document Human Resources Management Info-Guide for more information on human resources issues.