Step by Step Guideline
The first decision is to determine the type of business that you want to start: Sole proprietorship, Partnership or Corporation. Please ensure to seek accounting advice to outline the pros and cons of each type of business.
The first 2 options may not require you to go to the Registry unless you want to attach a trade name to your business.If you choose the 3rd option you have 2 alternatives:
· A numbered company that is given by the registry. Ex: 1985742 AB Inc.
· A named company will require to make a search to verify that the name that you are interested is available. Be prepared with a couple of name option.
Register your business
Registering a corporation is relatively simple process and can be done by yourself or we can do it for you.
The second step is to register your company with Canada Revenue Agency and get a business number that will identify your company. (RC account)
If your expected income will be higher than $ 30,000 a year it is suggested to also require a GST account. (RT account)
If you are expecting to process payroll in your business a payroll account can be requested. (RP account)
The third step is setting up a minute book. It can be bought when you register your company or later. It is important to note that the minute book is a binder that documents company bylaws, regulations and important decisions.
Once these 3 steps are fulfilled you can start operating your company by identifying clearly the company name, its address and business number. This disclosure on business invoices and documents is important, to make the public aware that you are operating as a corporation.
When your business has more than one shareholder
A fourth step, if your company has more than 1 shareholder is to decide who will act as director and what share structure the company will have. This is an important decision and we suggest getting the proper advice.
As the company starts operating, record keeping is critical.
This will allow you to know your income sources and where the company spends its resources. It is also important because a good record keeping is required by CRA to support your corporate tax returns.
Record keeping can be done as simple as with a spreadsheet or the suggested option is to use bookkeeping software. Ex: QuickBooks, Sage, etc.In all cases invoices and receipts have to be kept for 6 years.
Our firm can setup your recordkeeping system that can be desktop based or online (cloud) according to your needs.
Following this process step by step, will help avoid problems in the future so you can focus on running your business while you are properly advised by your chartered accountant on bookkeeping, payroll, and tax matters.
Other topics that we can discuss when you start are:
* Business plan.
* Deadlines to comply with CRA
* Registering to access your business account and/or authorizing a representative.
* Office expenses and use of personal vehicle for businessok
* How to decide your fiscal year end
* Which expenses are deductible and which not.
for a free consultation !