British Columbia Business Registration (6 Step Detailed Guide)

Registering a business in British Columbia (BC) requires thorough preparation and forethought. This guide will walk you through the six essential steps to set up and manage a business in BC, whether you choose to operate as a sole proprietorship or navigate the intricacies of incorporating a company. This comprehensive roadmap aims to equip you with the necessary knowledge and insights to make well-informed decisions, ensuring your business flourishes.

Step 1 - Do You Need to Register Your Business?

All businesses located in BC, except for sole-proprietorships operating under the individual's name, must register with the BC business registry. A sole-proprietorship can operate under the proprietor's own name without registering with the Registrar of Companies; however, it may have to be registered with local authorities to obtain a business license. Note, this is separate from the extra-provincial registration requirement for businesses located outside of BC that do business in BC.

Step 2 - Choose the Right BC Business Structure

The two most common business structures in BC are sole proprietorship and corporation. Other less common structures such as partnerships will not be the focus of this article.

Different Business Structures in Ontario

Corporation (BC)

Description. A legally separate business owned by shareholders. Governed by the Business Corporations Act (BC). Can be completely owned and operated by foreigners.
One-time government fee: $350
One-time name fee: $30
Annual government fee: $43.39

Corporation (Federal)

Description. Similar to a BC Corporation but governed by the Federal district. 25% resident Canadian requirement.
One-time government fee: $200
One-time name fee: $13.80
Annual government fee: $12

Sole Proprietorship

Description. A sole proprietorship is a business structure in which a single individual owns and operates the business, making them personally responsible for its profits, losses, and liabilities.
One-time name fee: $30
One-time government Fee: $40

Pros and Cons of Different Business Structures

Business Type	Setup Fees	Pros	Cons
Corporation	$$$	Legal shield, easier to invest in, potential tax benefits	More complex, more expensive to set up and maintain
Sole Proprietorship	$	Simple structure & reporting	No legal separation between the individual and the business
Partnership	$	Can share costs between individuals	No legal shield, decisions require consensus between partners

Illustrative Costs Associated With Each Business Structure

	Corporation	Sole Proprietorship
One-time Government Name Search or Reservation Fee	Federal - $13.80 BC - ~$30	$30
One-time Government Fee	Federal - $200 BC - $350	$40
Annual Government Fee	Federal - $12 BC - $43.39	N/A
One-time Extra-Provincial Name Registration Fee	Federal - $30 BC - N/A	N/A
One-time Extra-Provincial Registration Fee	Federal - $350 BC - N/A	N/A
Annual Extra-Provincial Registration Fee	Federal - $43.39 BC - N/A	N/A
Legal	$1500+ for lawyer to form company + $500+/year	$0+
Accounting	$1500+ for tax return preparation	$500+ for tax return preparation
Accounting Software	$0 to $700/year	$0 to $700/year
Payroll Software	$25/month + $4/employee	$25/month + $4/employee

Disclaimer. This are ballpark numbers to give a sense, situation and requirements will dictate

Step 3a - Register a Sole Proprietorship in BC

Registering as a Sole Proprietorship in BC is straightforward. The length of time to register is generally dependent on the time it takes to reserve a business name which is slower in BC than other provinces. Typically name reservation will take 10 business days, you can check the most up to date wait time on the BC Business Registry Name Request page.

Steps to register a Sole Proprietorship:

1. Search for name conflicts. Check for name conflicts for your proposed name using the BC Business Registry Name Request page and the Canadian Trademarks Database.

2. Reserve your name Reserve a business name at a $30 cost using BC Business Registry Name Request page

3. Create a BC Registries and Online Services Account Create an account by following the steps listed here.

4. Register your Business Login to the BC Business Registry and register your sole-proprietorship for a $40 fee.

Step 3b - Incorporate in BC

Businesses can be incorporated in BC as either a Federal Corporation or an BC Corporation. There are some relatively minor differences but importantly both can sell across Canada and across the globe.

Federal Corporation with BC Extra-Provincial Registration

A common choice for corporations in BC is a Federal Corporation with an BC Extra-Provincial Registration.

Extra-Provincial Registration

Extra-provincial registration in Canada refers to the process of a business entity obtaining permission to operate in a province or territory other than the one in which it was initially incorporated. Federal corporations typically must be extra-provincially registered at least in the province which they are headquartered in.

Steps to Incorporate a Federal Corporation with BC Extra-Provincial Registration:

1. NUANS Name Search. Conduct a NUANS name search through the Corporations Canada portal. Cost is $13.80 and is completed almost immediately.
2. Incorporate with Corporations Canada. Through the online portal, the same one you used for the NUANS Name Search, incorporate your business and pay a $200 fee. Corporations Canada provides recommended text you can use for items such as share classes, restrictions on share transfers, etc. Through the process you are required to sign the Articles of Incorporation and Initial Registered Office Address and First Board of Directors both of which are generated for you. You must keep a signed copy of both these documents.
3. Reserve your name in BC Reserve a business name at a $30 cost using BC Business Registry Name Request page.
4. Create a BC Registries and Online Services Account Create an account by following the steps listed here.
5. Extra-provincially Register your Business Login to the BC Business Registry and complete your extra-provincial registration for a $350 fee.
6. Set Up Minute Book and Resolutions. Each corporation must maintain a minute book, which holds registers, ledgers, bylaws, resolutions, articles of incorporation, etc. Every corporation must also have the board of directors and shareholders issue certain resolutions relating to topics such as bylaws, appointing officers and directors, waiving of an auditor, etc. This step can get pretty confusing and it's recommended you hire legal/accounting advisors or use a service like Ribbon to do this for you.

BC vs Federal Incorporation

Federal Corporations, compared to BC Corporations, have higher legal name protection and can move their HQ between provinces. BC Corporations have the benefit that they don't require Resident Canadian directors.

Step 4 - Set Up Tax Accounts

Canada Revenue Agency Business Number. A business requires a Canada Revenue Agency Business Number if it is a corporation or if it needs a CRA Account (GST/HST, Payroll Deductions, Import/Export)

Integration with Canada Revenue Agency

Every Federal and BC Corporation is automatically signed up for the Canada Revenue Agency (CRA) Business Number (BN). When filing a T2 Tax Return with the Canada Revenue Agency, or paying HST, the BC taxes are automatically included so no separate provincial income tax or provincial sales tax return are required.

Goods and Service Tax/Harmonized Sales Tax (GST/HST) Account. If a business has sales of greater than $30,000 within the past 12 months it must register for a GST/HST account with the Canada Revenue Agency. Businesses that don't meet this mandatory threshold may still optionally register for the GST/HST account.

Provincial Sales Tax (PST) account. If a business has sales of $10,000 or more in BC and is located in BC then they must register for, charge and remit BC's PST. Read more about the PST by checking out the [Provincial Sales Tax (PST) Bulletin] (https://www2.gov.bc.ca/assets/gov/taxes/sales-taxes/publications/pst-001-registering-to-collect-pst.pdf).

Payroll Account. If you have employees, and you hire them as employees not as contractors, you must register for a Payroll Account with the Canada Revenue Agency. Certain mandatory deductions such as Canada Pension Plan, Employment Insurance and Income Tax Deductions are remitted through the Payroll Account.

WorkSafe BC. If you have employees in BC you must register for the mandatory provincial workplace safety program named WorkSafeBC.

Step 5 - Obtain Licences and Permits

Signing up for business permits and licenses is of paramount importance as it ensures legal compliance and legitimacy for your business operations. These permits and licenses are not only a legal requirement but also serve as a crucial safeguard, helping you avoid fines, legal troubles, and potential disruptions to your business activities. Moreover, they can enhance your business's credibility and trustworthiness in the eyes of customers and partners, ultimately contributing to your long-term success and sustainability in the marketplace.

In general BC is business friendly, if you are ever uncertain of requirements you can call up a local government entity (city, township, etc.) and speak with a representative to clarify requirements for you to obtain the correct permit or licence.

tip

BizPal is a great resource to find permits and licences

Step 6 - Stay Compliant - Annual and Ongoing Obligations of BC Businesses

Sole Proprietorship Obligations

A sole proprietor must file a T1 Tax Return (Individual Tax Return) if the business:

• has to pay tax for the year;
• disposed of a capital property or had a taxable capital gain in the year;
• has to make Canada Pension Plan/Quebec Pension Plan (CPP/QPP) payments on self-employed earnings or pensionable earnings for the year;
• wants to access employment insurance (EI) special benefits for self-employed persons; or
• received a demand from the Canada Revenue Agency to file a return.

Reference - Canada Revenue Agency

The remainder of the sole proprietorship obligations depends on what tax accounts, permits and licences they have signed up for.

Corporation Obligations

Corporate obligations are more demanding than the sole proprietors

Key annual and ongoing obligations

• File an annual return with the relevant business registry
• File T2 return with the Canada Revenue Agency
• File relevant returns for Canada Revenue Agency Program Accounts (GST/HST, Payroll, Import/Export, etc.)
• Maintain a minute book
• Complete mandatory director and shareholder duties
• File relevant returns or file renewals for permits and licenses as applicable

Ribbon Makes Business Easy

To keep a corporation compliant is challenging. Ribbon gives entrepreneurs the tools to help them stay compliant. From setting up minute books, to taxes, payroll and accounting, Ribbon let's Entrepreneurs focus on their business. Learn more about Ribbon or email support@getribbon.ai.

Summary

In summary, registering a business in British Columbia is a deliberate and structured undertaking, as detailed in this comprehensive guide. Whether pursuing a sole proprietorship or venturing into incorporation, these six fundamental steps equip you with the requisite knowledge and insights to navigate the complexities of launching and managing a business in this dynamic province. By carefully adhering to these steps and staying abreast of your obligations, you can lay a robust foundation for your enterprise and pave the way for its success in British Columbia.