Licensing and Other Regulatory Requirements (Tips to getting started)
By Helen Hirsh Spence and Debra Yearwood
Licensing and Other Regulatory Requirements
There are numerous “first” tasks when establishing a business. In addition to opening a new bank account, choosing a structure and deciding on the name of your business, the following provides a quick guide to help get you on track and stay there.
Naming Your Business and Your Web Domain Name
Think carefully about what you call your business and how easily it can be remembered. Consider asking friends (or even better, strangers) for their input. Make sure the name reflects what you do, sell or something about your particular audience. Even if the business name is your last name add qualifiers for clarity. For example, the name Yearwood or even Yearwood Consulting doesn’t really tell people what you do, but Yearwood Communications provides a little clarity. Creating a name can be both fun and challenging, take your time, there’s nothing more frustrating than getting stuck with a name that doesn’t work or one you have to constantly be explaining. It's also an expensive exercise if you have to change it later on.
A business name should also be consistent with the voice of your brand. Is it playful, serious, clever or optimistic? Whatever you choose, make sure it's also memorable. This is not always easy but if you can anchor your brand name in two sensory places it's more likely to be remembered. Consider something that calls to mind a physical and emotional memory. Use familiar words or sounds. To be memorable it should also be short. Long brand names are not only difficult to remember, but they also make for awkward logos or wordmarks.
Once you have chosen a name, find out if you can legally use it by verifying that it hasn’t been taken or trademarked by a competitor or even someone in another industry. For this, you will have to do an online name search. This can be done through Service Ontario or Service Canada.
The structure generally determines what taxes are paid, make sure you familiarize yourself with what’s appropriate for your business in your region;
File a T1 return
Register for GST and HST or consult Guide RC4022. General Info for GST/HST registrants.
File a Statement of Partnership Income, Form T5013
Corporations have to file a T2 corporation tax return for the fiscal period.
Depending on the type of business you are in, you will need to determine the best way to protect your intellectual property. There are different mechanisms available to you, but even if precautions have been taken, someone might still infringe on your IP. Be vigilant about protecting content. Conduct periodic searches online and get legal advice on the best way to protect your business.
Patent: Patent protection is required if you have an invention or improvement to one.
Trademark: Trademark protection is required for certain words, designs and logos that identify your business.
Copyright: Copyright is required to protect artistic work (literary, musical, dramatic, other).
Registration: Registration covers industrial designs. These are visual features of shape, configuration, pattern or ornament (e.g., a uniquely designed chair).
You also need to be aware of those things that belong to others such as images, music, names and even ideas. Generally speaking, the ownership is determined through a legal process. Even if you come up with an idea, you may not be the owner if someone came up with the idea first and can prove it. If you would like to use an idea that belongs to someone else you need to ask for permission.
Register Your Business
Most provincial and territorial governments require registration. There are two types of registration for your business, your name registration and your federal business number (BN). A business name must be registered if:
your business is a corporation operating under a name different from its corporate name.
you’re a sole proprietor or partnership business has a name different than your own full name or that of one of the partners.
your business name has expired and is no longer available.
your business is a limited liability.
Once registered, you will obtain a business number. You will need this BN if you want to open an account for your business with the bank. You can also be fined if you are supposed to register your business and don’t. Fines can be as high as $2000 for an individual to $25,000 for a corporation. It should be noted that registering a business name does not mean you have exclusive rights to it. To do that you will need to trademark the name. Registration is effective for five years and you have up to 60 days after it expires to renew.
A business number from the Canada Revenue Agency may also be necessary. This unique identifier is for federal programs including GST/HST (RT), corporate income tax (RC), payroll deductions (RP) and import-export (RM). Not all businesses need a BN, but one is necessary if you want to interact with federal business programs. You can register your business using My Business Account through an online secure portal or you can do so by phone. You will need a BN if you:
have a club or charity.
need to claim a rebate or register for GST/HST.
are a trustee/administrator of a registered retirement savings plan or a registered retirement income fund.
open a payroll deductions program.
Are you an Employer?
As an employer, you will be required to manage payrolls, calculate deductions (CPP, EI, etc.), understand taxable and non-taxable benefits and allowances, complete and file information returns as well as tax returns. There are consequences, such as interest and penalties, if these are overlooked. Familiarize yourself with the following:
The Employment Insurance Act
The Canada Pension Act
Income Tax Act
The format of records is determined by the type of information your records contain. There are numerous combinations and permutations involved in providing this information. Depending on whether you are an e-business, a retail business, services, importing or exporting; each will require very specific accounting and reporting.
Permits and Licenses
The type of business will dictate the permits or licenses required. For complete and current requirements, we suggest you refer to guides provided by the Government of Canada as well as provincial guidelines.
These are some of the most frequently accessed:
Canada Occupational Health and Safety Regulations
Income Tax Regulations
Disclosure - Advertising and Marketing
There are legal requirements that must be followed when promoting or advertising products and services in Canada. They are largely focussed around the concept of truth in advertising. In effect, advertising cannot be misleading or dishonest. In addition, there are specific regulations associated with different sectors and advertising practices.
The following Acts are responsible for federal advertising rules:
Consumer Packaging and Labelling Act
Textile Labelling Act,
Precious Metals Marking Act
Canadian Consumer Handbook http://www.consumerhandbook.ca/en/
The Canada Pension Act: http://laws-lois.justice.gc.ca/eng/acts/C-8/index.html
Canada Pension Plan and Employment Insurance Explained: https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-3.html
Canada Revenue Agency - Are You an Employer? https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-overview/employer-responsibilities-payroll-steps/you-employer.html
Canada Revenue Agency, My Business Account: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/business-account.html
Employment Insurance Information for Employers: https://www.canada.ca/en/employment-social-development/corporate/contact/employment-insurance-employers.html
Fees and Service Standards http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00116.html
GST/HST register an account, collect, file, and remit GST/HST https://www.canada.ca/en/services/taxes/gsthst.html
Import-export Program Account https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/import-export-program-account.html
Income Tax Act: http://laws-lois.justice.gc.ca/eng/acts/I-3.3/
Innovation, Science and Economic Development of Canada website at: http://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07064.html#ic-subnav-1-
Integrated Business Services New Upgraded Automated Name Search (Nuans) https://www.ic.gc.ca/eic/site/075.nsf/eng/home
When Do You Have To Open a Payroll Program Account Payroll Program Account? https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-overview/employer-responsibilities-payroll-steps/opening-a-payroll-program-account/when-you-have-open-a-payroll-account.html