Starting a business in Canada
Provincial or federal is the first fork, the CRA business number ties it together, and GST/HST at $30,000 is the line everyone learns.
Checked against the sources on 2026-08-30
Before anything else
A Canadian sole proprietorship under your own name needs no registration at all - a trade name registers provincially for a small fee. The apparatus arrives with the CRA business number (BN), one nine-digit identity carrying program accounts for GST/HST, payroll and corporate tax as you need them.
Incorporation offers a real choice: federal (under the CBCA, ~$200 online, name protected nationwide) or provincial (Ontario, BC and friends, similar cost, simpler when business stays home). Federal corporations still register extra-provincially where they operate - the national name is the prize, not an exemption.
The legal shell
Sole proprietorship or corporation?
Sole proprietorship
Starting simple.
$0-80 (trade-name registration by province).
Personal liability; business income stacks on your marginal personal rate.
Corporation
Liability, retained earnings, or clients requiring it.
~$200 federal online, ~$300-400 in most provinces.
The small business deduction (~9% federal on the first $500k of active income) rewards profits left in the company - but paying yourself out re-taxes them, and the accounting is a real annual cost.
The sequence
Register the name or incorporate
Where: Provincial registry, or Corporations Canada onlineTakes: Same day online in most cases
A NUANS or provincial name search backs a named corporation; numbered corporations skip the fight entirely and add a trade name later.
Get the business number and the accounts you need
Where: CRA Business Registration OnlineCost: $0
The BN arrives with incorporation federally, or on first registration otherwise. Add the GST/HST account when required, payroll only when someone is paid.
GST/HST at $30,000
Small-supplier status ends when worldwide taxable revenue passes $30,000 over four rolling quarters; registration is then mandatory. The rate charged is the customer province’s (5% GST to 15% HST) - place-of-supply rules, not your own address. Voluntary early registration reclaims input credits and is normal for B2B.
Watch out: Quebec runs its own QST administration - selling into Quebec is its own checklist.
Instalments and the personal side
Sole-proprietor profit files on the T1 with CPP contributions at both halves (~11.9% to the ceiling); tax instalments become due once the bill passes $3,000. Corporations file T2s and manage the salary/dividend mix - the standing task of Canadian small-business accounting.
What it costs to start
| What | Amount |
|---|---|
| Trade name | $0-80 |
| Incorporation | $200-400 |
| BN and CRA accounts | $0 |
| Accountant (corporation) | $1,500-3,000/year |
| CPP (self-employed)Both halves are yours. | ~11.9% to the ceiling |
The words on the forms
- BN
- The CRA business number all program accounts hang off.
- GST/HST
- The federal/harmonised sales tax; registration mandatory past $30,000.
- Small supplier
- The under-$30,000 status that spares registration.
- NUANS
- The name search behind named corporations.
- Small business deduction
- The ~9% federal rate on the first $500k of active corporate income.
- T1 / T2
- The personal and corporate returns.
- QST
- Quebec’s separately administered sales tax.
The traps
- Missing the rolling four-quarter $30,000 test after one strong quarter.
- Charging your own province’s rate instead of the customer’s.
- Incorporating federally and skipping the extra-provincial registration where you actually operate.
- Forgetting both halves of CPP in the first self-employed tax estimate.
Where to check this yourself
- CRA - Business RegistrationBN and program accounts.
- Corporations CanadaFederal incorporation.
- GST/HST rulesThresholds and place of supply.
This is a map, not legal or tax advice - and an honest one about how it was drawn: the Germany guide was written by a person who walked the route; most other countries were drafted with AI against the official sources and have not yet been walked by someone who did it. Laws change. Every guide carries the date it was last checked and the sources to check it yourself - and if you have been through one of these routes, your corrections are exactly what this handbook wants.