If you are a freelancer, no matter what type of work you do, you should consider registering your business. It can provide benefits, from helping you take full advantage of tax credits to looking more professional for your clients.
It is also fast and simple to do, as long as you do it the right way.
So, let’s take a look at what is involved, the pro and cons, and how to make it as easy as possible.
How to register your business
Choose a type of business
When registering your business, you can decide to create a sole proprietorship or a corporation. A sole proprietorship is the official name for a business owned by a single person. It is typically a good choice for freelancers as it keeps things simple.
On the other hand, creating a corporation involves making the business its own separate legal entity. It is a more complex process but also offers its own benefits. Here are some things to consider:
Sole proprietorship benefits
Simple to register.
Low startup costs.
You maintain complete control.
Sole proprietorship drawbacks
All liability continues to be on you.
Can be harder to get investments and loans (some investors and financial institutions will require your business to be incorporated).
Your business income continues to be taxed as personal income (it can bump you to a higher rate if the business earns enough money).
Access to more tax breaks.
The company becomes its own legal entity, so you have less liability
A lot more paperwork.
You may lose some control of the business (you have to deal with directors and shareholders).
Pick a name
You will need to choose a name for your business. If you are having trouble coming up with ideas, you can always stick with your first and last name as your business name. But whatever you choose, you should try to make sure your business name is unique.
Make sure the name isn’t taken
To find out if there are already businesses in Canada with the same name, you can use the NUANS database. NUANS stands for New Upgraded Automated Name Search, and it is the official database of incorporated and trademarked companies in Canada. The fees vary by province from $25 to $80 CAD, and in exchange, you get a report on all the similar names that are already taken.
It is worth noting that simply registering your business will not give you name protection. That is because it prevents other businesses from registering with the same name in your province, but not in the rest of the country. For that, you would need to trademark your business name.
Register your business
To register your business, you will need to have a name, address, email, and description of the business. Depending on what type of business it is, you may also need to apply for licenses (such as health permits and operational licenses). It is suggested to read the government-approved website www.bizpal.ca to see which permits you need. Once you have all of those requirements covered, you are good to go.
Renew your registration
You may be required to renew your business registration periodically, depending on which province your business is registered in. For example, in British Columbia, the registration will never expire, while in Ontario you are required to renew your registration every five years.
Ensure you look up the rules for your province or territory, and don’t forget to mark your calendar (because typically, you will not get a reminder from the government that it is time to renew).
In addition, no matter what province you are registered in, you will need to re-register if you want to change your business’s name or switch ownerships.
The 3 benefits of registering
Here are just a few of the reasons it is a good idea to register your business:
1. The ability to choose a name
If you want your business to have a name that is not your first and last name, you are legally required to register your business,or face fines.
Registering a business can help freelancers appear more professional and give confidence to their prospective clients. For example, there may be times when you are entering into a contract, and the client will want some standard details about your business. If you have to respond that you are not registered as a business, you could be viewed as an amateur.
3. Simplicity and control
When compared to other forms of business, starting a sole proprietorship is simpler and gives you complete control over your business.
Save time and money by registering with Ownr
Ownr makes it easy for entrepreneurs to launch their businesses in Canada. The Ownr Blog is constantly updated with resources, information, and insider information from successful entrepreneurs to make sure new business owners have what they need to get started.
Business registration made simple
Ownr can help you register a business in a quick and simple way, for a fraction of what it would normally cost, without the need to hire a lawyer.
With Ownr you can skip the NUANS name search fees, because you get up to 30 unique name searches for free. Plus when you use Ownr to search for business names you can search in real-time, unlike NUANS reports, which can take up to five business days.