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Business Start-Up Info-Guide
Last Verified:
2008-01-10
Are you thinking of starting a business? The process can be overwhelming. That is where the Canada/Nova Scotia Business Service Centre (C/NSBSC), your first point of access to business information, can make your life easier.
The C/NSBSC has developed this guide to help you navigate through the federal and provincial government programs, services and regulations that may apply to individuals interested in starting a business in Nova Scotia.
For more information or clarification, please contact us at:
Canada/Nova Scotia Business Service Centre
1575 Brunswick Street
Halifax, Nova Scotia
B3J 2G1
Telephone: 902-426-8604
Fax: 902-426-6530
Toll-free (information): 1-888-576-4444
TTY Toll-free (hearing impaired): 1-800-457-8466
E-mail: cbns@canadabusiness.ca
Web site:
http://www.canadabusiness.ca/ns
TABLE OF CONTENTS
1. Before you Begin
Know Yourself
Starting your own business can bring you independence, the chance to be your own boss, and the opportunity to earn profits. But owning your own business is a big commitment: your time, money and security will be tied up in your work. Will you have family support and understanding? Will you be trading in a secure income for the risks of being an entrepreneur? Are you sure you know and understand all the risks? Before you make that commitment, make sure going into business is what you really want.
Before opening a business, you can objectively evaluate
your readiness by doing a self-assessment. A self-assessment is an
inventory of your previous education, training, experience, skills, knowledge
and interests. It will help you discover what you are good at, what you need to
improve on, and what kind of business you should or shouldn't open. Self
assessments can be found in a variety of locations. The Canada/Nova Scotia
Business Service Centre (1-888-576-4444, cbns@canadabusiness.ca,
http://www.canadabusiness.ca/ns ) has a variety of self-assessment tools available you can use
either in person or over the Internet. You can also visit the following Web
sites:
Business
Development Bank of Canada -
BDC - Entrepreneurial self assessment
Canadian Bankers Association - Getting Started in Small Business
Online Small Business Workshop
Have a Plan
A business plan is a map of how you are going to start and run a successful business. It is a written document that says who you are, what you plan to do, where your business will be located, when you expect to start working, how you will manage your business, the profits you expect to make, the risks you will face, and how you will deal with those risks.
Financial lenders and product or service suppliers will ask you to present your business plan to see whether you have done things properly. Your business plan is an important tool for promoting yourself and your business idea. If you don't have a completed business plan, you will likely experience difficulty gaining access to financing.
If you want more information on business planning, contact us (1-888-576-4444, halifax@cbsc.ic.gc.ca, http://www.canadabusiness.ca/ns ). Our walk-in library has books on how to write a business plan as well as over 250 sample business plans on different types of businesses to help you get started.
The Interactive Business Planner (IBP) is an online tool that can assist you in preparing a three-year business plan for a new or existing business. The IBP walks you through the business plan process, allowing you to input your data and information, save and download it. This tool is available at the following web site: Interactive Business Planner
The following document on preparing a business plan is available from the Canada/Nova Scotia Business Service Centre:
Know Your Market
A successful marketing plan is an essential part of your business plan and outlines your overall marketing strategy to meet your objectives. It demonstrates extensive knowledge of your products and services, customers, and competition. Your marketing plan presents your research on pricing and promotion, and states your marketing or advertising plans for your products or services.
Locating accurate and specific information is an important first step in your market research and the development of your marketing plan. Statistics Canada, the Nova Scotia Department of Finance, and the Canada/Nova Scotia Business Service Centre can help you gather relevant information, including industry statistics and reports, demographics, family expenditure patterns, and a list of potential competitors, to name a few. Also, our walk-in library holds many titles that could assist you in preparing your marketing plan.
Other documents on market research and developing your marketing plan are available from the Canada/Nova Scotia Business Service Centre:
Guide to Market Research and Analysis
Market Analysis
Marketing Plan Outline
Ways to Promote Your Product or Service
Choose Your Business Structure
One basic question facing all new business owners is "What business structure is best for me?" The four main types recognized in Canadian law are:
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Sole proprietorship (single owner)
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Partnership (two or more owners)
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Corporation (separate legal entity)
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Cooperative (member-owned)
Each business structure allows and requires different things. People new to business may think it doesn't matter how a business is organized or structured, but it can make a big difference:
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The right structure can help you reduce costs and maximize profits.
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Investors or partners might only be interested in a certain structure.
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Banks and other sources of capital may be more willing to lend to certain structures than others.
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A business structure affects how your business will grow.
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Taxation and tax planning differ with regard to structure.
To help you better understand the four business structures, the following document is available from the Canada/Nova Scotia Business Service Centre: Forms of Business Organization. Speak with an accountant or lawyer if you require advice on which structure is right for you.
Choose Your Location
The location you choose for your business will influence its success. A bad choice may result in failure, while a good choice could help ensure success. Many entrepreneurs believe a thorough consideration of population demographics, competition, and traffic volume are sufficient in their location decisions. But there are other factors to consider, including compatibility with other local businesses, the presence of an effective merchants association, the responsiveness of the landlord, as well as zoning regulations and planning, to name a few.
For more information on locating your business, the following document is available from the Canada/Nova Scotia Business Service Centre: Store Location - "Little Things" Mean a Lot.
2. Getting Started
Business Name
You must register your business name with the Registry of Joint Stock Companies unless your business name is your first and last name only (for example: Jane Doe, no requirement to register. Jane Doe Enterprises, legally required to register). When you register your business name, you ensure no one else will carry on business under that name.
The Registry of Joint Stock Companies must perform a Name Search before you can register your chosen business name to ensure the name is not currently in use (contact the Registry of Joint Stock Companies for applicable fees). If the name you have chosen is not in use, the Registry reserves the name for you for 90 days, by which time you must register and pay the applicable annual fee. Once you have registered, you will be issued a Business Number.
Business registration forms are available in print at your nearest Access Nova Scotia centre or online through the Registry of Joint Stock Companies' Web site, the Nova Scotia Business Registry: http://gov.ns.ca/snsmr/nsbr/entry.asp. From there you can:
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Register a business
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Apply for, renew and pay for business licenses
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View and change business information
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Perform a preliminary name search
For more information, please
contact:
Registry of Joint Stock Companies
Service Nova Scotia and Municipal Relations
9th Floor, Maritime Centre
1505 Barrington Street
P. O. Box 1529
Halifax, Nova Scotia
B3J 3K5
Telephone: (902) 424-7770
Fax: (902) 424-4633
Toll-free (information): 1-800-670-4357
E-mail: joint-stocks@gov.ns.ca
Web site:
http://www.gov.ns.ca/snsmr/rjsc/
Business Number
You will need a Business Number (BN) from the Canada Revenue Agency (CRA) for the following reasons:
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To file your annual tax return if your business is incorporated
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To import or export goods to and from Canada
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To remit payroll deductions (Income Tax, Employment Insurance, Canadian Pension Plan) for your employees
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To collect and remit GST/HST
The Business Number is a common identifier for many organizations and is now used by Service Nova Scotia and Municipal Relations, as well as the Workers' Compensation Board of Nova Scotia.
If you have a Business Number and the structure of your business changes, you must register for a new BN. If, for example, you decide to incorporate your sole proprietorship, a new BN is needed.
For additional information on the Business
Number, the following document is available:
Business Number - BN.
For more information,
please contact:
Canada Revenue Agency
Ralston Building
1557 Hollis Street
P.O. Box 638
Halifax, Nova Scotia
B3J 2T5
Toll-free (information): 1-800-959-5525
Toll-free (publications): 1-800-959-2221 (Forms and Publications)
Web site:
http://www.cra.gc.ca/menu-e.html
For further information on tax considerations, see the Business Taxes section.
Permits and Licenses
Many types of businesses require licensing from the federal, provincial and/or municipal government in order to operate. These requirements could include necessary permits, special permission to operate in your chosen location, or specific qualifications for you and/or your employees.
Each municipal government has the authority to issue its own business licences within its jurisdiction. Since no uniformity exists throughout the province regarding municipal licences for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations and licensing requirements. Businesses (including home-based businesses) must also meet the zoning by-laws that control property uses in their municipality.
BizPaL is an online service that walks Canadian businesspeople through the process of finding comprehensive information about permits and licensing requirements from all levels of government. BizPaL helps you generate a personalized list of the business documents you need for the levels of government - local, provincial/territorial, and federal - you may have to deal with in order to grow or start up your business. BizPal is currently available in Nova Scotia for the Halifax Regional Municipality and New Glasgow. For more information, the following document is available:
BizPaL - Business Permits & Licences
The Province of Nova Scotia also maintains the Nova Scotia Permits Directory which includes information on many permit requirements, as well as links to the municipalities of Nova Scotia.
For more information, visit the following web
site
:
Nova Scotia
Permits Directory at
http://www.gov.ns.ca/snsmr/paal
3. Business Taxes
Income Tax
You must report your business income on an annual basis. Business income includes money you earn from a profession, a trade, a manufacture or undertaking of any kind, and an adventure or concern in the nature of trade or any other activity you carry on for profit or with a reasonable expectation of profit.
If you are self-employed, your business structure will determine how you remit taxes and report your income. If you are a sole proprietor or a member of a partnership, you can obtain Income Tax information from Canada Revenue Agency's publications Business and Professional Income and Guide to Canadian Small Businesses. These publications will also give you an overview of the types of business expenses you can claim. Different rules apply to Incorporated companies. Canada Revenue Agency's T2 Corporation Income Tax Guide has more details on the filing requirements for corporations.
Self-Employed Income Considerations
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Employment Insurance (EI): As a self-employed worker, you do not contribute to employment insurance nor will you be eligible to receive these benefits.
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Canada Pension Plan (CPP): As a self-employed worker, you will have to remit both shares of CPP contributions and your income taxes in quarterly installments.
Harmonized Sales Tax
You must register for and charge the Harmonized Sales Tax (HST) if you provide taxable goods and services in Canada and your total taxable revenues were more than $30,000:
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in the immediately preceding four consecutive calendar quarters
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in any single calendar quarter
If you are a public service body (charity, non-profit organization, municipality, public college, university, school authority, or hospital authority), this limit is $50,000.
There may be advantages to registering early, such as the right to claim the HST you pay on your business's start-up expenses from the time you register. To register for the HST, you will need your Business Number.
For more information on the GST/HST, the following documents are available:
General Information for GST/HST Registrants
http://www.cra.gc.ca/E/pub/gp/rc4022/
Guide for Canadian Small Businesses
http://www.cra-arc.gc.ca/E/pub/tg/rc4070/
Tax Credits
A number of tax credit programs are available to assist businesses: Equity Tax Credits; New Small Business Tax Reduction (for incorporated businesses); Labour-Sponsored Venture-capital Tax Credits; Research and Development Tax Credits; and Manufacturing and Processing Tax Credits. See the document Taxation Info-Guide or call the Canada/Nova Sscotia Business Service Centre for a copy.
For further information on the above, please contact the Canada Revenue Agency at:
Canada Revenue Agency
Ralston Building
1557 Hollis Street
P.O. Box 638
Halifax, Nova Scotia
B3J 2T5
Toll-free (information): 1-800-959-5525
Toll-free (publications): 1-800-959-2221 (Forms and Publications)
Web site:
http://www.cra.gc.ca/menu-e.html
Municipal Taxation
Nova Scotia has 55 municipal unites, 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. 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. The Business Occupancy Tax is a percentage of a business’ commercial tax assessment. There are three different categories and level of taxation that your business may fall into. Bill 191 amended the Municipal Governance Act to allow the phase out of the Business Occupancy Tax over several years. The category your business is in determines when you will stop receiving business occupancy assessments and stop paying business occupancy tax. See the document: Business Occupancy Assessments.
For more information, please
contact:
Assessment Head Office
Service Nova Scotia and Municipal Relations
10 North
1505 Barrington Street
PO Box 216
Halifax, Nova Scotia
B2J 2M4
Telephone: (902) 424-5200
Fax: (902) 424-0720
Toll-free (information): 1-800-670-4357
E-mail: askus@gov.ns.ca
Web site:
http://www.gov.ns.ca/snsmr
Payroll Deductions
Under the Income Tax Act, an employer is required to withhold any amounts relating to income tax from an employee's pay. As an employer, you are holding these deductions in trust for your employees; therefore, you are expected to keep these funds separate from the operating funds of your business.
The Canada Revenue Agency offers payroll deduction tables that contain information to help you calculate Income Tax deductions. These are available on paper or diskette from your tax services office or tax centre. You may also download them directly from the CRA Web site: http://www.cra.gc.ca/payroll.
4. Protecting your Business
Incorporating your business
Incorporating your business establishes it as a distinct legal entity, which provides the ability to raise capital by selling shares, limited liability, and possible tax advantages. A business can be incorporated either provincially or federally. If a business is to operate primarily in one province, provincial incorporation may be sufficient. However, if a business will operate in multiple provinces, then federal incorporation may be advantageous. Additionally, a federally incorporated business will need to register in each province in which it does business.
For more information on incorporating, the following documents are available:
Federal and Provincial Incorporation
Information Services - Corporations Canada
Online Federal Incorporation
Federal Business Incorporation - Canada Business Corporations Act (CBCA)
For more information on provincial incorporation, please contact:
Registry of Joint Stock Companies
Service Nova Scotia and Municipal Relations
9th Floor, Maritime Centre
1505 Barrington Street
P. O. Box 1529
Halifax, Nova Scotia
B3J 3K5
Telephone: (902) 424-7770
Fax: (902) 424-4633
Toll-free (information): 1-800-670-4357
E-mail: joint-stocks@gov.ns.ca
Web site:
http://www.gov.ns.ca/snsmr/rjsc/
For more information on federal incorporation, please contact:
Corporations Canada
Industry Canada
9th Floor
Jean Edmonds Tower South
365 Laurier Avenue West
Ottawa, Ontario
K1A 0C8
Telephone: 613-941-9042
Fax: 613-941-0601
Toll-free (information): 1-866-333-5556
E-mail: corporationscanada@ic.gc.ca
Web site:
http://corporationscanada.ic.gc.ca/
Intellectual Property
In Canada, the right to use or sell business names and certain products can belong to someone. This is known as intellectual property. The Canadian Intellectual Property Office (CIPO) is a government organization that protects rights associated with inventions, names of products and services, and copyrighted works. CIPO can explain how to protect any brand or special name, product, or invention you might have. They can also inform you if you are accidentally copying someone elses' intellectual property, which could otherwise result in potential infringement lawsuits.
For more information on intellectual property, please contact:
Canadian Intellectual Property Office
1575 Brunswick Street
Halifax, Nova Scotia
B3J 2G1
Telephone: 902-426-8604
Fax: 902-426-6530
Toll-free (information): 1-800-668-1010 (Atlantic region)
1-866-997-1936 (anywhere in Canada)
TTY Toll-free (hearing impaired): 1-866-442-2476
E-mail: boyd.tom@cbsc.ic.gc.ca
Web site:
http://cipo.gc.ca
Privacy
Canada's Personal Information Protection and Electronic Documents Act sets out ground rules for how private sector organizations can collect, use, or disclose personal information in the course of commercial activities. It balances an individual's right to privacy with the need of organizations to collect, use, or disclose personal information for legitimate business purposes.
For information on your responsibilities under the Act, the following document is available:
Protection of Personal Information - Your Responsibilities
For more information, please
contact:
Privacy Commissioner of Canada
3rd Floor, Tower B
Place de Ville
112 Kent Street
Ottawa, Ontario
K1A 1H3
Telephone: 613- 995-8210
Fax: 613-947-6850
Toll-free (information): 1-800-282-1376
TTY (hearing impaired): 613-992-9190
Web site:
http://www.privcom.gc.ca/index_e.asp
Insurance and Bonding
Bonding and other types of business insurance can protect your enterprise from unpredictable damage and problems. Most businesses that have assets should have insurance protection. Think seriously about the type and amount of insurance your business requires, and to deal with a knowledgeable insurance company or broker.
For more information on insurance and bonding, the following documents are available from the C/NSBSC:
5. Hiring Employees
Things to Consider
The Human Resources Management Info-Guide has information on several topics related to employment and hiring, including:
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Payroll (minimum wage rates, calculating deductions and employer/employee deductions, holidays and benefits, overtime)
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Layoffs and termination (amount of notice required by employers and employees, severance packages)
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Labour relations (development of handbooks and policies, collective bargaining, employee motivation)
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Employment equity (equal opportunity, Nova Scotia Human Rights Commission)
Assistance Programs
The Wage Subsidies and Training Programs guide contains information on assistance available to employers for hiring employees or for training programs.
Workers' Compensation
The Workers' Compensation Board (WCB) of Nova Scotia provides financial and health care benefits to injured workers, and cost-saving programs and legal protection for employers registered with the WCB.
The Workers' Compensation Act requires that most firms which employ three or more workers at the same time register for coverage. This includes full-time, part-time, and casual workers, as well as sub-contractors. Some businesses do not require coverage.
For more information, please
contact:
Halifax
Workers' Compensation Board of Nova Scotia
5668 South Street
P.O. Box 1150
Halifax, Nova Scotia
B3J 2Y2
Telephone: 902-491-8999 (general) or 902-491-8324 (employer services)
Fax: 902-491-8002
Toll-free (information): 1-800-870-3331
E-mail: info@wcb.gov.ns.ca
Web site:
http://www.wcb.ns.ca
Sydney
Workers' Compensation Board of Nova Scotia
Suite 117
336 Kings Road
Sydney, Nova Scotia
B1S 1A9
Telephone: 902-563-2444
Fax: 902-563-0512
Toll-free (information): in Cape Breton 1-800-880-0003
Web site:
http://www.wcb.ns.ca
6. Operating your Business
Bookkeeping
Bookkeeping is a method for recording financial transactions in a manner that is consistent, easy to understand, and accurate. Bookkeeping can be performed in several ways, though many are too complex for the average business owner and are typically left for professional accountants. It is a legal requirement that financial records provide a complete profile of the daily income and expenses of a business; there is no specified format.
Record keeping is essential to enable the business owner to make sound financial decisions and to satisfy the demands of many government agencies. Also, like having a concrete business plan, well-kept records will make matters easier when dealing with a bank or other financial institution.
For further information, as well as a detailed example
of how to prepare a single-entry bookkeeping system, the following document is
available:
Basic Bookkeeping
Banking
Business bank accounts
Although it is not necessary for a business to open its own bank account, doing so maintains a level of professionalism and reduces any ambiguity that may concern governments or creditors about where the money is really going. It is acceptable for someone in charge of a sole proprietorship to use his or her own personal account, but for the reasons listed above, money should be payable to an account in the business’s name.
Line of credit
Businesses that rely primarily on credit sales from customers typically rely on a line of credit from a bank or financial institution in order to have enough cash to deal with net working capital needs, such as rent and employee wages. A line of credit is an amount of capital that may be borrowed from the bank at any time, subject to interest rates and repayment conditions specified by the financial institution. The maximum amount that can be borrowed is determined by both the bank and the business operator, and usually depends on the past revenues of the business, as well as the projected cash flow.
Financing
Starting a business will probably require more resources than the operator has at his or her disposal, hence the need for capital: the term for money that finances business. Financing comes from a combination of debt and equity, with debt being comprised of short and long term loans, and equity being made up of the personal money of the business operators and their friends and family, as well as money from stockholders who own shares. However, for a small business just starting out, it is unlikely there will be any shareholders to provide a source of capital. For more information on financing options, please see the following document:
Equity
Having a high level of equity generally results in increased leverage for the company. Leverage is represented by the ratio of debt to equity, and demonstrates a higher capacity to obtain debt financing. A business proposal with equity of $1,000 and requiring financing of $3,000 would have a debt to equity ratio of 3:1. This is fine for an established company, which is likely to be able to pay off its debts, but most banks would prefer a business in its early stages have a ratio of 2:1 or 1:1.
Short and long term debts
A short term debt refers to a loan which will be paid off in a period of less than a year. Consequently, long term debts refer to a repayment period greater than a year. Long term loans are more difficult for a business to secure, and almost always require a business plan and cash flow statement to be presented to the lender.
7. Finding Information in your Area
We have created a resource guide for each county in Nova Scotia, highlighting local and other resources you may contact for additional information or assistance with regards to your business. The following is a list of the available guides:
DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.
Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.