You’ll likely face more and more legal decisions as your business matures. Whether changing your business structure, charging the Goods and Services Tax (GST), filing for intellectual property protection, hiring employees, expanding overseas, importing, or considering a foreign investment, you should be aware of and comply with new laws.
Should You Incorporate?
As a new business, a sole proprietorship or partnership may have been the most appropriate business structure. But as your business grows, you might want to consider incorporation.
Advantages of incorporating:
- Name protection in British Columbia
- Limited liability protection
- Transfer of ownership
- Continuous existence
- Separate legal entity
- Ease of raising capital (compared to a sole proprietorship or partnership)
- Possible tax advantages if you qualify for a small business tax rate
Disadvantages of incorporating:
- Cost
- Increased regulations
- Recordkeeping requirements
- Possible double taxation of profits
- Charter restrictions
Consider the advantages and disadvantages of incorporating and whether it’s the right decision for your business.
Provincial and Federal Incorporation
To change your business structure, you must dissolve your existing proprietorship or partnership and register as a new corporation. In this case, you’d need to complete and file a Dissolution Request with the BC Registry.
There are two options for registering as a corporation:
- Self-incorporation online with Corporate Online.
- Incorporation through a lawyer. Consider our Talk to a Lawyer advisory service if you’re looking for a lawyer.
If you’re thinking about expanding your business to other provinces in Canada, you might want to consider federal incorporation, as it would provide name protection across Canada. However, you’d still have to file and register as an extraprovincial company in each province where you wish to establish a physical presence.
For more information regarding the federal incorporation process, refer to Corporations Canada. Take a look at Corporate Online for details on registering an extraprovincial company.
Registering a “Doing Business As” Name
As a corporation, you may wish to register a different name to run an existing business. This alternate name is often referred to as an operating name, trade name, or a “Doing Business As” (DBA) name.
DBAs are registered as proprietorships, with one owner being the corporation. Since they fall under the corporate umbrella, they have the corporation’s limited liability and use the same business numbers, but don’t have name protection.
Filing and Reporting
As your business grows, maintaining an organized record and accounting system will go a long way in helping you manage your company. If you incorporate, recordkeeping and filing statements are mandatory. Also, you should consider seeking the services of a chartered accountant or certified general accountant to assist you with your corporate income tax.
Have You Reached the Mandatory Threshold for GST?
If you’re a small supplier who has yet to charge and remit GST and your business is growing, you might consider registering with the Canada Revenue Agency. Even if you have yet to reach the GST threshold, you can claim back the GST you paid on the expenses related to your business by registering. However, you must also collect and remit GST from your customers.
Are You Protecting Your Intellectual Property?
As you build your brand, invent new products, or create other forms of intellectual property, you’ll want to prove ownership and protect them as valuable business assets.
There are five types of Intellectual Property (IP) protection:
- Patent – Protects inventions, which can be a product, composition, process, or improvement on any of these.
- Trademark – Protects your business or brand name, logo, and design. Provides exclusive rights to words, symbols and designs that distinguish your company, products or services from those of someone else.
- Copyright – Protects artworks such as books, maps, lyrics, musical scores, sculptures, paintings, photographs, films, computer programs, games, and databases.
- Industrial design – Protects original shapes, patterns, or ornamentations applied to a manufactured article.
- Integrated Circuit (IC) topographies – Protects the topography (three-dimensional configuration) design of the electronic circuits of an IC product.
Contact the Canadian Intellectual Property Office for more information and to register for the appropriate IP protection.
Are You Hiring Staff?
If you hire employees, you should contact the following agencies:
- Canada Revenue Agency (CRA) – You must obtain a Business Number (BN) for payroll deductions. As an employer, you’re responsible for deducting the Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and income tax from remuneration or other types of income you pay. Then, you must remit them to the CRA and report them on applicable slips. Contact the CRA for more information.
- Employment Standards Branch – Be aware of your basic legal requirements as an employer. Contact the Employment Standards Branch for more information.
- WorkSafeBC – If you have employees or incorporate, you must register with WorkSafeBC.
Are You Considering Investment?
Your company has several options to raise money from investors without going public. But, before going down this road, it’s essential to know the BC laws that apply to any company or entity that raises money from investors.
The two basic requirements of British Columbia’s securities legislation are registration and disclosure. To find out more, read our Seeking Investment? Know the Rules article.
Are You Expanding Into New International Markets?
Exporting can be rewarding, but it should not be taken lightly. Find out if you’re export-ready and learn the basics of the process before taking your business abroad. The first step is to register your business for an import-export account.
Learn more about the exporting process through Export Navigator.
Are You Importing Goods?
If the goods you need for your business are unavailable in Canada or cost less in another country, you may want to import them. Importing commercial goods into Canada is regulated, so you’ll need solid preparation to establish your import venture.
Before importing, you should examine the regulatory and legal issues, find sources of funding and financing, learn more about the process, and do market research. Look at the Canada Border Services Agency’s website for more information.
Are You Considering Foreign Investment?
Investing abroad allows you to strengthen your operations, gain access to new markets, and acquire new technologies, resources, and skills. Attracting foreign investment can be critical to your business as an added source of capital, expertise, and a vital technology transfer mechanism. Foreign investment opportunities are available through mergers, acquisitions, partnerships, joint ventures, strategic alliances, or new investments.
Small Business BC is Here to Help
SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our business articles.