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Newfoundland and Labrador Business Registration (6 Step Guide)

Newfoundland and Labrador / Canada Flag

Registering your business in Newfoundland and Labrador (NL) is a vital step in your entrepreneurial journey, whether as a sole proprietor or corporation. This guide outlines the six essential steps for NL business registration, from understanding its necessity to maintaining compliance.

Step 1 - Do You Need to Register Your Business?​

Sole proprietorships in NL are not required to register but if they intend to operate using a business name other than the owner's name they must register that business name. Corporations, on the other hand, must register before commencing their operations.

Step 2 - Choose the NL Business Structure​

The two most common business structures in NL are sole proprietorship and corporation. Partnerships will not be the focus of this guide.

Different Business Structures in NL​

Description. A legally separate business owned by shareholders. Governed by the Corporations Act (NL). Can be completely owned and operated by non-residents.
One-time government fee: $300.00
One-time name reservation fee: $10.00
Annual government fee: $100.00

Pros and Cons of Different Business Structures​

Business TypeSetup FeesProsCons
Corporation$$$Legal shield, easier to invest in, potential tax benefitsMore complex, more expensive to set up and maintain
Sole Proprietorship$Simple structure & reportingNo legal separation between the individual and the business
Partnership$Can share costs between individualsNo legal shield, decisions require consensus between partners

Illustrative Costs Associated With Each Business Structure​

CorporationSole Proprietorship
One-time Government Name Search or Reservation FeeFederal - $13.80
NL - $10		$10
One-time Government FeeFederal - $200
NL - $300		$0
Annual Government FeeFederal - $12
NL - $100		$0
One-time Extra-Provincial Name Registration FeeFederal - $10
NL - N/A		N/A
One-time Extra-Provincial Registration FeeFederal - $560
NL - N/A		N/A
Annual Extra-Provincial Registration FeeFederal - $100
NL - N/A		N/A
LegalLawyer ($1000+ and $500+/year),
Ribbon ($300+/year)		$0+
Accounting$1000+ for tax return preparation$300+ for tax return preparation
Accounting Software$0 to $700/year$0 to $700/year
Payroll Software$20/month + $3/employee/month$20/month + $3/employee/month

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

Step 3a - Register a Sole Proprietorship in NL​

Registering a Sole Proprietorship in NL can be completed online.

Steps to Register a Sole Proprietorship:

  1. Search for Name Conflicts. Check for name conflicts for your proposed name using the Companies and Deeds Online and the Canadian Trademarks Database.

  2. Submit a "Name Registration Request". Through the Companies and Deeds Online submit a Name Registration Request, part of this process will be a $10 fee.

Step 3b - Incorporate in NL​

Businesses can be incorporated in NL as either a Federal Corporation or a NL Corporation. There are some relatively minor differences but importantly both can sell across Canada and across the globe. This guide will cover federal corporations with NL extra-provincial registration.

Registering a Federal Corporation with NL 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.

Steps to Incorporate a Federal Corporation with NL 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. NL Extra-Provincial Registration. The extra-provincial registration process in NL cannot be completed online. The mandatory documents must be submitted along with the $560 fee. Read more about the process and required documents.
  4. 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.
NL vs Federal Incorporation

Federal Corporations, compared to NL Corporations, have higher legal name protection and can move their HQ between provinces. NL Corporations have the benefit that they don't need to complete the extra-provincial registration process in NL and are cheaper due to relatively high extra-provincial registration fees in NL .

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 Canada Revenue Agency Account (GST/HST, Payroll Deductions, Import/Export). The Business Number is automatically assigned for corporations but sole-proprietorships need to apply for them.

Federal Corporation Integration with Canada Revenue Agency

Every Federal Corporation is automatically signed up for the Canada Revenue Agency Business Number. When filing a T2 Tax Return with the Canada Revenue Agency, the NL provincial corporate tax is taken by the Canada Revenue Agency so a separate provincial income tax return is not required.

Goods and Service Tax/Harmonized Sales Tax (GST/HST) Account. Sales tax in NL are integrated with the Canada Revenue agency and are charged as 15% HST on sales. 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.

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.

Step 5 - Obtain Licences and Permits​

If you ever have any doubts or questions about the requirements, you can simply reach out to a local government representative, whether it's from the city or township. They'll be more than happy to assist you in understanding what's needed to secure the right permit or license.

tip

BizPal is a great resource that makes it easy to search for the permits and licences you may need to start or grow your business

Step 6 - Stay Compliant - Annual and Ongoing Obligations of NL 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.)
  • File relevant provincial taxes (may be required if you sell/operate in other provinces)
  • 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, maintaining registers to annual filings, Ribbon let's Entrepreneurs focus on their business. Learn more about Ribbon or email support@getribbon.ai.

Conclusion​

Beginning the process of registering your business in Newfoundland and Labrador (NL) is a crucial step that forms the basis for your entrepreneurial path in this province. By adhering to the six outlined steps in this guide, you can skillfully navigate the complexities of business registration, select the appropriate organizational structure, and fulfill your tax and licensing commitments. Whether you choose a sole proprietorship or a corporation, it's vital to maintain compliance with local regulations to ensure the continued prosperity of your business. Keep in mind that there are numerous resources and tools available to assist you throughout this journey.