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Starting a Small Business in Canada: First Steps

Many newcomers dream of starting their own business, and Canada has a supportive small-business environment. Before you jump in, it helps to understand the steps, the paperwork and any limits that apply to your status.

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In this guide

Choose a structure

StructureWhat it meansConsider if…
Sole proprietorshipYou and the business are legally the sameYou're starting small and want the simplest setup
PartnershipTwo or more people share ownershipYou're going into business with others
CorporationA separate legal entity owned by shareholdersYou want to limit personal liability or plan to grow

Each has different tax and legal consequences. An accountant or lawyer can help you pick, and many small-business centres offer free introductory advice.

The first steps

  1. Step 1: Test your idea

    Talk to potential customers, check the competition and work out whether your prices cover your costs.

  2. Step 2: Register your business

    Register your business name and structure with your province or territory. Requirements differ.

  3. Step 3: Get a Business Number

    The Canada Revenue Agency issues a Business Number that you use for tax accounts such as GST/HST and payroll.

  4. Step 4: Check licences and permits

    Your city or province may require licences for certain businesses, such as food, trades or childcare.

  5. Step 5: Open a separate bank account

    Keeping business and personal money apart makes bookkeeping and tax time much easier.

Sales tax

Most businesses must register for GST/HST once their taxable revenue passes the small-supplier threshold, currently $30,000 over four consecutive calendar quarters. Some businesses choose to register earlier. Provincial sales taxes work differently from province to province.

Where to get help

  • Local small-business centres and chambers of commerce, which often offer free workshops
  • Settlement agencies with entrepreneurship programs for newcomers
  • A licensed accountant, who can advise on structure and tax

Navak provides general information only. It is not legal, immigration, financial or tax advice.

Next guideFiling Your First Canadian Tax ReturnHow the Canadian tax year works, which slips to expect, and why filing even on a low income can put money back in your pocket.

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