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Whether you're a freelancer working several jobs or a hopeful entrepreneur developing a side hustle into a full-time career, registering your business as a sole proprietorship is a small but important step that can help you reap rewards.
Here are five reasons why registering your business as a sole proprietorship, no matter how small, is a smart move:
1. Create your brand. Registering your business as a sole proprietorship name helps you establish a brand identity. Check whether the name you want to use is available and unique, and not already taken by an existing company name or trademark.
2. The tax man. Small businesses in Canada need to charge GST/HST on their products or services if revenue is more than $30,000 a year. At that point, you'll need to register for a GST/HST account, but you first need to register your business as a sole proprietorship.
3. Get the money. You might need a business bank account to accept payments, pay suppliers and keep your business income separate from personal accounts. You may also benefit from a business credit card to charge expenses or a loan to expand. When applying for financial services for your business, you'll need proof that you are operating a viable business. Your business registration number can be proof that you're legitimate.
4. Develop your reputation. Customers and suppliers want to deal with established businesses. Many do their homework and research companies before purchasing their products or services. Registering your business as a sole proprietorship establishes a start date for how long you've been running a legitimate business.
5. Build your empire. As your business grows, you may need to hire employees. This requires you have a registered business, which allows you to establish payroll, open an account with the Canada Revenue Agency for payroll deductions, and set up Workers Compensation, health benefits and more. The Canadian Federation of Independent Businesses provides information on the steps to take when hiring your first employee. Register your business as a sole proprietorship quickly and easily online at ownr.co.
