How to Start a Small Business in Canada

By Susanna Lo

  • Overview

    These are the main steps you need to start a small business in Canada. It is best to incorporate your business to protect your personal assets.
  • Incorporating

    • Step 1

      Start by incorporating. This protects your personal assets from any legal issues that could arise from your business associations. Decide if you want to incorporate federally or provincially. If you live in Ontario or Alberta and plan to do business only in that one province, incorporate provincially, as it is cheaper. If you plan to do business in more than one province and want to use the same company name, incorporate federally.


    • Step 2

      Choose a corporate name that identifies the activities of your business so it's easy for potential clients to know what you do. Once you decide on a name, check to see if it's available. The Canadian Registrar, the federal agency that is responsible for registering all letters, commissions and proclamations issued under the Great Seal of Canada, does not allow two businesses to have similar names. Many websites offer free searches.
    • Step 3

      Prepare your incorporation documents. You need to create the memorandum, which is a set of rules for your business. The articles of incorporation come next. These are the rules and regulations that govern the members and directors of your business. Prepare the notice of office, which states the location of your business, then file your papers at the Corporations Directorate, the federal agency that handles incorporation.
    • Step 4

      Get your business up and running. Canadian law requires that you keep corporate records in a minute book, including keeping track of corporate bylaws, minutes of all company meetings and copies of any forms filed with the government.
    • Step 5

      Your final step is to set up a corporate bank account once you receive your articles of incorporation. In Canada, your corporation is its own legal entity, so it needs to have its own bank account. Take your incorporation papers to the bank when you do this. In addition, file any permits you might need to begin operation of your business. If you're a restaurant that plans to serve alcohol, get your liquor license. If you're a contractor, get a contractor's license.
    • Skill: Moderately Challenging

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