How to Start a Business in Canada

Starting a business in Canada means dealing with a business registry, the Canada Revenue Agency (CRA) and local governments. This guide covers the first steps in order. Federal rules apply across Canada; the provincial examples use Ontario. Other provinces and territories have their own registries, fees and rules.

Figures in this guide were checked against CRA and Government of Ontario pages in September 2026.

Quick answer

Choose a business structure, register your business name or incorporate, and get a CRA Business Number if you need a GST/HST, payroll or other program account, or if you incorporate. Then check which licences and permits apply, open a separate business bank account, and set up bookkeeping from the first transaction.

Key takeaways

Your structure decision (sole proprietorship, partnership or corporation) affects liability, taxes and paperwork. Get professional advice before you choose.
In Ontario, a sole proprietor must register a business name only when operating under a name other than their own full name.
The Business Number is a 9-digit number. Program accounts such as GST/HST (RT) and payroll (RP) are added to it as you need them.
BizPaL is an online government search tool for the permits and licences your business type may need.
A separate bank account and day-one bookkeeping make every later step, including tax time, easier.

Step 1: Choose a business structure

Most small businesses in Canada start as one of three structures.

Structure	Liability	How income is taxed (general)
Sole proprietorship	You are personally liable for the business	Business income is taxed at your personal rate and reported on your personal return using Form T2125
Partnership	Partners are personally liable for the business	Each partner’s share of income is taxed at their personal rate
Corporation	A separate legal entity; your personal liability is limited	The corporation files its own return and may qualify for lower tax rates

A sole proprietorship is the simplest to set up and run. A corporation separates the business from you but adds its own registration, tax accounts and filings. Whether incorporating makes sense depends on your income, how you plan to pay yourself, your risk and your plans for the business.

If you incorporate, you can do it federally through Corporations Canada or provincially through your province’s registry. Each option has its own advantages and disadvantages, and the right choice can depend on where you plan to operate. This is a legal decision. Talk to a lawyer and an accountant before you choose.

Step 2: Register your business name (Ontario example)

In Ontario, business names are registered under the Business Names Act through the Ontario Business Registry. Registration is required for:

a sole proprietor carrying on business under a name other than their own full name
a general partnership using a name other than the full names of all partners
a corporation operating under a name other than its corporate name

So if Jordan Lee works as “Jordan Lee,” no name registration is needed. If Jordan trades as “Lee Home Renovations,” it is. As of September 2026, the Ontario fee for a sole proprietorship or general partnership is $60, and the registration expires every five years.

Registration is not ownership

Ontario states that the Business Names Act does not protect the exclusivity of a registered name, and identical names can be registered. Search existing names and trademarks before you commit to signage or a website.

Step 3: Get a CRA Business Number and program accounts

The CRA says you need a Business Number (BN) if you need a GST/HST, payroll or other CRA program account, or if you incorporate. The BN is a unique 9-digit number. When you open a program account, a program identifier and reference number are added to it. Common accounts are:

RT – GST/HST: if you need to collect GST/HST.
RP – Payroll: if you pay employees. You must register before your first remittance due date.
RC – Corporation income tax: if your business is incorporated.
RM – Import-export: if you import or export commercially.

Residents can register online through the CRA’s Business Registration Online service. Ontario residents can then link directly to the provincial registration site.

For GST/HST, under the CRA rules in effect in September 2026, most businesses must register once taxable sales exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. Below that, you are a small supplier and can register voluntarily. Our guide to how GST/HST works for small businesses covers the details. If you plan to hire, read payroll basics for Canadian employers first.

Step 4: Check licences, permits and insurance

Licences depend on what you do and where. A home bakery, a contractor and an online store face very different rules. BizPaL is an online service provided by federal, provincial, territorial and municipal governments. You enter your business type and location, and it lists the permits and licences you may need.

Insurance needs also vary by business. Ask an insurance broker what coverage fits your activities, and check whether clients or landlords require proof of coverage before you sign anything.

Step 5: Separate your money and set up bookkeeping

Open a business bank account before your first sale. Mixed personal and business spending makes bookkeeping slower and tax time harder. Our guide to choosing a business bank account explains what to look for.

Then set up simple bookkeeping from day one: record every sale and expense, keep receipts, and reconcile monthly. The CRA generally requires you to keep records and supporting documents for six years from the end of the last tax year they relate to. Start with accounting fundamentals for small businesses and the free Small Business Bookkeeping Checklist in Ronidex resources.

Your first 30 days

When	Task	Where
Days 1–5	Compare structures; book time with a lawyer or accountant	Professional advisers
Days 1–10	Draft a start-up budget	Business Budget Calculator
Days 5–14	Search names; register your business name or incorporate	Provincial registry or Corporations Canada
Days 10–20	Get a BN; add GST/HST or payroll accounts if needed	CRA Business Registration Online
Days 10–20	Check licences and permits	BizPaL and your municipality
Days 15–25	Open a business bank account; arrange insurance	Your bank; an insurance broker
Days 20–30	Set up bookkeeping and a cash flow forecast	Bookkeeping software or spreadsheet; Cash Flow Calculator

Example: a sole proprietor in Ontario

Example (illustrative numbers)

Maya starts a graphic design business in Hamilton, Ontario, as a sole proprietor called “Northline Studio.” Because the name is not her own full name, she registers it through the Ontario Business Registry for $60. She expects about $24,000 of sales in her first year, so she is below the $30,000 small supplier threshold and decides, with her accountant, not to register for GST/HST yet. She has no employees, so she does not need a payroll account. She opens a separate chequing account, budgets $3,000 for a laptop, software and insurance, records transactions weekly, and checks her sales each quarter against the $30,000 threshold.

Plan your own numbers with the Business Budget Calculator, then test timing with the Cash Flow Calculator.

Common mistakes

Choosing a structure based only on tax rates, without advice on liability and total cost.
Assuming a registered business name gives exclusive rights to it.
Not tracking sales against the $30,000 GST/HST threshold.
Hiring before opening a payroll account.
Skipping municipal licences because the business is small or home-based.
Paying business costs from a personal card and losing the receipts.

Frequently asked questions

Do I need a Business Number as a sole proprietor?

Only if you need a CRA program account, such as GST/HST or payroll. An unincorporated sole proprietor with no such accounts reports business income on their personal return using Form T2125.

Is registering a business name the same as incorporating?

No. Registering a name records the name you trade under. Incorporating creates a separate legal entity with its own tax filings.

I don’t live in Ontario. Does this still apply?

The CRA steps apply across Canada. Name registration, incorporation, fees and licences differ by province, territory and municipality, so use your own province’s registry and BizPaL.

If you’d rather have help keeping your books, see Ronidex’s bookkeeping and accounting support.

Sources

This guide is general educational information, not personalized tax, legal or accounting advice. For decisions about your own situation, talk to a qualified professional.