How to start a business

startup

Stage 1: Before you start

For income tax purposes, Canada Revenue Agency expects your business to make a profit and there is evidence to support this profit. For (Goods and Services Tax) GST and (Harmonized sales tax) HST purpose, business activities can be related to the business but not necessary generating profit. For example, buying office supplies such as notebooks for your business will not generate profit directly but it is considered business expenses and the HST on that kind of transaction can be used to reduce your HST payable.

At the beginning before starting operating, choose your business structure. This will affect how you will report your business income and other major business elements that I will talk about in more details later on. There are three types of companies or business structure that you can choose from.

  1. Sole proprietorship (self employed)
  2. Partnership (party of two or more)
  3. Corporation (party of one or more)

(You can consult with Kappa Accounting Inc to make the right decision)

After deciding which of the types fits the nature of your business and the risks associated with it. With a little help from your accountant, you can be sure that you made the right decision.

 Stage 2:  Starting your business

In Canada most of us have social insurance number; businesses will need a number too. It’s called Business Number (BN). The purpose of it is to simplify your dealings with the federal and the provincial government agencies.

Once your business has number, you will need to:

  1. Register for GST/HST Account (HST number will similar to your BN)
  2. Register for Payroll Account if you are planning to hire employees.
  3. Register for Import/export account if you will send or receive products from outside Canada

(Kappa Accounting Inc helps you register your business and all other accounts)

 Stage 3: Ongoing activities

Here is when you will definitely need help from an accountant to save you time and let you focus on your core business rather than running after all bookkeeping and accounting activates.

Here is a list for the activities that you have to do at least once a year.

  1. You will need to organize your business expenses and income (receipts and invoices)
  2. You will need to file GST/HST returns
  3. Payroll remittance (CPP, EI, T4) / WSIB
  4. Reporting your business earnings and paying income tax
  5. Prepare financial statement

It may sound like a lot of work, but don’t worry, we’re here to help make your business experience as easy as possible. If you have any questions or if you need help in any stage of your business, Kappa accounting Inc can help.

 

Noor Dawood

Kappa Accounting Inc.