Starting a business? This is what you need to know.
04 Dec 2019
Amir Ortas, CPA - Accounting Manager
Starting a business could be stressful and challenging. In addition to setting up the logistics and developing a potential client base, entrepreneurs must consider all of the government administrative requirements of owning a business. If these requirements are not complied with, it could become very costly.
Most small businesses begin as sole proprietorships, which require less reporting than a corporate or partnership structure.
Sole proprietors may operate under their personal name or choose a business name. If you decide to choose a business name, it must be registered with a provincial government agency. In Ontario, you can register the business name through Service Ontario.
Sole proprietors report their business' profit or loss on their personal income tax return. The filing due date of this return for sole proprietors is June 15, however any tax owing is due on April 30th.
Most businesses must register to collect and remit sales taxes. In Ontario, the Canada Revenue Agency (CRA) collects the Harmonized Sales Tax (HST). Sales tax registration is required once a business exceeds gross revenue of $30,000 over the last four quarters. Registration for HST can be done online on the CRA website.
As soon as the business begins to hire employees, registration for a payroll account with CRA is necessary. Similar to HST registration, this can be completed with CRA. At this point, source deductions from each employee's pay are required with respect to income tax, Canada Pension Plan contributions and Employment Insurance premiums.
Many businesses with employees also require registration with the Workers Safety Insurance Board (WSIB), which requires the remittance of WSIB premiums on a monthly or quarterly basis.
The penalties and interest involved when a business is not registered appropriately for any of these programs, and/or does not withhold and remit the accurate amount of tax or premiums could become severe and significant.
We are happy to help you ease the burden of government reporting and registration requirements. Contact SBLR LLP for assistance.