business start-up information - economic partnerseconomicpartners.com/en/download/busienss start-up...

Economic Partners Sudbury East / West Nipissing is a community-based, non-profit organization that is dedicated to creating opportunities for entrepreneurship and to the pursuit of economic growth in our community. We are your local branch of the Community Futures Development Corporation (CFDC) and a member of the Ontario Association of Community Futures

2016

Business Start-up Information

http://oacfdc.com/frame3.asp?lang=english

Business Start-Up Information 2016

Development Corporations (OACFDC). Funded by Industry Canada and FedNor, CFDC is a community economic development initiative designed to help find local solutions for local economies.

Who We ServeWe service a total catchment population of 21,277 people that includes the following communities:

Sudbury East Dokis First Nation French River Markstay-Warren St. Charles

West Nipissing Nipissing First Nation Nipissing

What We Do We are people helping people. Run by a board of local volunteers and professional staff, we take a grass roots approach to investing in local entrepreneurs, exporters, and community initiatives.

Here are the key services that we offer you:

o Community economic planning and development o Access to funding for community projects and small businesses o Business counselling, services, and resources

30 Front Street, Unit ASturgeon Falls, ON P2B 3L4Telephone: 705-753-5450

Fax: 705-753-3456Website: www.economicpartners.com

Email: [email protected]

Table of Contents

Business Start-Up Checklist....................................................................................................................4

Business structures..................................................................................................................................5

Option 1: Sole proprietorship...............................................................................................................6

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mailto:[email protected]

http://www.economicpartners.com/

http://www.ic.gc.ca/eic/site/fednor-fednor.nsf/eng/home

http://www.ic.gc.ca/eic/site/ic1.nsf/eng/home

http://oacfdc.com/frame3.asp?lang=english


Option 2: Partnerships.........................................................................................................................7

Option 3: Corporations.........................................................................................................................8

Option 4: Cooperatives........................................................................................................................9

Licenses, permits and registrations......................................................................................................10

Municipal..............................................................................................................................................11

Provincial..............................................................................................................................................11

Master Business License...............................................................................................................11

Ontario’s Workplace Safety and Insurance Board.....................................................................13

Ontario’s Employer Health Tax (EHT)..........................................................................................14

Ontario’s Employment Standards.................................................................................................15

Ontario Tax Services (ONT-TAXS)..............................................................................................16

Retail Sales Tax..............................................................................................................................16

Federal.................................................................................................................................................17

GST/HST..........................................................................................................................................17

Payroll Deductions (Source Deductions).....................................................................................18

Business Insurance................................................................................................................................19

Industry Specific Contacts.....................................................................................................................19

Useful Internet Sites...............................................................................................................................20

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Business Start-Up Checklist

Business Preparation

Business Idea

Chose an option (start a new business, buy an existing one or purchase a franchise)

Chose ownership (sole proprietorship, partnership, or corporation)

Chose your business name

Prepare a business plan

Business Start-Up

Register your business name with the province of Ontario(Master Business License)

Register for HST/GST and/or payroll deductions with Canada Revenue Agency (if

applicable)

Check zoning and land use regulations with the municipality

Register and apply for all Municipal licenses and permits (if applicable)

Contact the Ministry of Labour for any Employment Standard questions

Register with Workplace Safety and Insurance Board (if applicable)

Register with industry specific agencies (if applicable)

Open a business bank account

Lease or purchase appropriate business premises and equipment

Purchase appropriate insurance for your business activities

Interview and hire expert help (lawyer, accountant)

Determine your employee needs and hire capable people (if applicable)

Determine your marketing initiatives and launch them

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Business structures

Choosing the structure that is suitable for your business can sometimes be challenging. However, it is wise to evaluate each form of business organization to determine which one is appropriate.

Now that you have decided on starting your own business, you will have to determine what business structure or form of organization suits your needs. The structure of your business will depend on whether you want to run your business yourself or with a partner or associates.

There are four types of business structures:

Sole proprietorship

Partnerships

Corporations

Cooperatives.

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Option 1: Sole proprietorship

With this type of business organization, you would be fully responsible for all debts and obligations related to your business and all profits would be yours alone to keep. As a sole owner of the business, a creditor can make a claim against your personal or business assets to pay off any debt.

This form of business organization is the most simple and common for self-employed people. Any income generated and expenses incurred are claimed through personal income taxes each year.

If the business will operate in your given name, you are not required to register the business. If you attach any word to your given name, you are required to register under the Business Names Act.

Example:Frank Ford – Does not need to registerFrank Ford Trucks – Needs to register

Advantages:

easy and inexpensive to form a sole proprietorship (you will only need to register your

business name provincially, except in Newfoundland and Labrador);

relatively low cost to start your business

lowest amount of regulatory burden

direct control of decision making

minimal working capital required to start-up

tax advantages if your business is not doing well, for example, deducting your losses

from your personal income, lower tax bracket when profits are low, and so on

all profits will go to you directly

Disadvantages:

unlimited liability (if you have business debts, personal assets would be used to pay off

the debt)

income would be taxable at your personal rate and, if your business is profitable, this

may put you in a higher tax bracket

lack of continuity for your business, if you need to be absent

difficulty raising capital on your own

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Option 2: Partnerships

A partnership would be a good business structure if you want to carry on a business with a partner and you do not wish to incorporate your business. With a partnership, you would combine your financial resources with your partner into the business.

You can establish the terms of your business with your partner and protect yourself in case of a disagreement or dissolution by drawing up a specific business agreement. As a partner, you would share in the profits of your business according to the terms of your agreement.

You may also be interested in a limited liability partnership in the business. This means that you would not take part in the control or management of the business, but would be liable for debts to a specified extent only. There must be at least one managing partner, and that one partner has unlimited liability. The limited partner will become a general partner if they take on ANY part of the management in the partnership.

When establishing a partnership, you should have a partnership agreement drawn up with the assistance of a lawyer, to ensure that:

you are protecting your interests

that you have clearly established the terms of the partnership with regards to issues like

profit sharing, dissolving the partnership, and more

that you meet the legal requirements for a limited partnership (if applicable)

Advantages:

easy to start-up a partnership

start-up costs would be shared equally with you and your partner

equal share in the management, profits and assets

tax advantage, if income from the partnership is low or loses money (you and your

partner include your share of the partnership in your individual tax return)

Disadvantages:

similar to sole proprietorship, as there is no legal difference between you and your

business

unlimited liability (if you have business debts, personal assets would be used to pay off

the debt)

hard to find a suitable partner

possible development of conflict between you and your partner

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you are held financially responsible for business decisions made by your partner (for

example, contracts that are broken)

Option 3: Corporations

Another business structure is to incorporate your business. This can be done at the federal or provincial level. When you incorporate your business, it is considered to be a legal entity that is separate from the owners and shareholders. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation.

Advantages:

limited liability

ownership is transferable

continuous existence

separate legal entity

easier to raise capital

possible tax advantage as taxes may be lower for an incorporated business

Disadvantages:

a corporation is closely regulated

more expensive to incorporate than a partnership or sole proprietorship

extensive corporate records required, including shareholder and director meetings, and

documentation filed annually with the government

possible conflict between shareholders and directors

possible problem with residency of directors, if they are in another province or the

majority are not Canadian

It is important to note:

If the owner personally guarantees a contract, then that owner is taking on liability.

If the owner personally does something that affects the business, they will be held

responsible/liable.

If the owner files the incorporation papers themselves, if there are any mistakes or

missing clauses, they would become personally liable once again.

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If you have decided to incorporate your business, you have some options to consider.

1. Two types of Incorporation: Provincial Federal

2. Incorporating the business name (IE. Ford Inc.)OrRegistering as a numbered company (IE. 123456 Ford Ltd.)

3. Two options for filing the Articles of Incorporation Independently (file by yourself) Hiring a lawyer to complete the process on your behalf (suggested)

Note:If you register as a numbered company and you wish to use an “operating as” name, you must register that name under the corporation with the province (Master Business License).

Option 4: Cooperatives

The last business structure you could create is a cooperative. With a cooperative, you would have a business that would be owned by an association of members. This is the least common form of business, but can be appropriate in situations where a group of persons or businesses decide to pool their resources to provide access to common needs, such as the delivery of products or services, the sale of products or services, employment, and more.

Advantages:

owned and controlled by members

democratic control (one member, one vote)

limited liability

profit distribution

Disadvantages:

possible conflict between members

longer decision-making process

participation of members needed for success

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extensive record keeping

less incentive to invest additional capital

Licenses, permits and registrations

This checklist shows the different licenses, permits, or registrations that you may be required to obtain from the different level of governments.

Municipal

- Licenses and permits

- Zoning regulations

Provincial

-Provincial Incorporation

-Master Business License

-WSIB Insurance

- Employer Health Tax (EHT)

-Ministry of Labour

-RST (retail sales tax)

Federal

-Federal Incorporation

-GST/HST

-Payroll Deductions

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Municipal

Ensure that you review the business licenses, by-laws, zoning, and business taxes with your Municipality.

The Corporation of the Municipality of West Nipissing225 Holditch Street, Suite 101Sturgeon Falls, Ontario P2B 1T1Tel: (705)753-2250Fax: (705)753-3950www.westnipissingouest.ca

Jean-Pierre Barbeau, Chief Administrative Officer

Marc Gagnon, Director or Public Works

Louise Laforge, Tax Collector & Deputy Treasurer

Roger Kennedy, Hydro Superintendant

Melanie Ducharme ,Planning Director

Peter Ming, Water & Sewer

Ginette Rochon, Environmental & Power Generation

Provincial

Master Business License

This license is required for all businesses operating in Ontario under a trade/business name. The license allows the business to advertise the name and to open a business bank account. Financial institutions require proof of registration to open a business account. The Master Business License will provide them with the business identification number (9 digit ID number).

Registration Activity Cost @ OBC Cost via mail

Sole Proprietorship $60 $80Partnership $60 $80Name Check $8 $12Online Registration $60Current fees* (as of March 17, 2011)

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http://www.westnipissingouest.ca/


Please Note: You are only able to search for records in the Ministry of Government Services' current database. The database only contains business names registered within the past five years.

Also, the registration of the business name does not grant you exclusive use of the name. In order to legally protect your business name, you would have to register a trademark/trade name or incorporate that name in the area you wish to be protected.

To register and/or obtain more information, contact:

Sole proprietorship or partnerships in Ontario are registered through Ontario Business Connects(OBC). These consist of workstations in business help centers, and registration can also be done online. Your business registration is valid for five years, after which time you need to renew your registration.

In person: Economic-Partners Sudbury East West Nipissing30 Front Street, Unit ASturgeon Falls, ON P2B 3L4705-753-5450(payment by credit card only)

Service OntarioUnit 111, 447 McKeown Avenue North Bay, ONGeneral Inquiries: 1-800-267-8097(payment by credit card or cash)

Online: https://www.ibsa.serviceontario.ca/ibsa/servlet/com.visionmax.servlet . CommandServlet?command=screenflownoscript&screenid=26

By phone: Service OntarioToll-free 1-800-267-8097

By mail: Ministry of Government Services393 University AvenueToronto, ON M5G 2M2$80.00 fee

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https://www.ibsa.serviceontario.ca/ibsa/servlet/com.visionmax.servlet


Ontario’s Workplace Safety and Insurance Board(Formerly Worker’s Compensation)

Most businesses in Ontario must register with the WSIB within 10 days of hiring their first worker. Registering provides workplace insurance coverage for all of your workers, gives you peace of mind, and lets you access experts in health and safety.

The benefits of registration are clear:

No-fault insurance.

Greater protection, since in most cases workers can't sue you following a work-related

injury or illness.

Benefits for your workers — WSIB insurance replaces lost earnings and covers health

care costs resulting from work-related injuries and illnesses.

Help in returning your workers to the job — and returning your business to full

productivity.

Training and prevention programs.


Registration Hotline at 1-866-734-9742

Workplace Safety and Insurance Board128 McIntyre Street WestNorth Bay, ONP1B 2Y6Tel: 705-472-52001-800-461-9521www.wsib.on.ca

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http://www.wsib.on.ca/


Ontario’s Employer Health Tax (EHT)

The Employer Health Tax is a payroll tax that applies to all employers in Ontario. Eligible employers do not pay tax on the first $400,000 of annual Ontario payroll. If you are associated with another employer, you have to share the tax exemption.

You have to pay EHT if you are an employer and you:

Have employees who report for work at your permanent establishment in Ontario

pay your employees from your Ontario permanent establishment if they don't report for

work at your permanent establishment, and

have Ontario remuneration over your share of the tax exemption.

To register for an EHT account you must provide the following information:

legal name

trade name

business address

mailing address

telephone and fax numbers

name of contact person or authorized representative

payroll start date

payroll frequency and amount to determine if you are a yearly, monthly or special filer

federal business number

employer type to determine if you are an associated employer, multiple account

employer or public sector employer.

To register and/or obtain further information, contact:

Employer Health TaxThe Ministry of Revenue toll-free at 1 866 ONT-TAXS (1 866 668-8297)http://www.rev.gov.on.ca/en/tax/eht/

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http://www.rev.gov.on.ca/en/tax/eht/


Ontario’s Employment Standards

Fairness in the workplace is the right of all Ontarians.Employment standards are enforced under the Employment Standards Act, 2000 (ESA), which sets out the minimum standards that employers and employees must follow.

The Ministry of Labour, through its Employment Standards Program:

enforces the ESA and its regulations

provides information and education to employers and employees, making it easier for

people to understand and comply voluntarily

investigates possible violations

resolves complaints

To obtain more information, contact:

Employment Standards Information Centre416–326–7160 1–800–531–5551 (Toll–free)http://www.labour.gov.on.ca/english/es/

Ontario Ministry of Labour159 Cedar StreetSudbury, ONP3E 6A5 Fax: 1-705-564-7435

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http://www.labour.gov.on.ca/english/es/


Ontario Tax Services (ONT-TAXS)

At the Ministry of Revenue we continuously address the changing needs of Ontario's 600,000 tax clients and have made it simpler for Ontario businesses to comply with their tax obligations. Businesses will now find themselves more connected and dealing with less paper.

Some of our improvements include:

one toll-free number; 1 866 ONT-TAXS (1 866 668-8297)

one business number;

new Internet services providing self-serve options

system improvements to provide you with convenient one-window service delivery.


Ontario Tax Services1 866 ONT-TAXShttp://www.rev.gov.on.ca/en/services/onttaxs/index.html

Retail Sales Tax

On July 1, 2010, the Retail Sales Tax (RST) was replaced by the Harmonized Sales Tax (HST). The provincial portion of the HST is eight per cent and the federal portion is five per cent, for a combined HST rate of 13 per cent.

To register and/or obtain information, contact:

1 866 ONT TAXS (1 866 668 8297).

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http://www.rev.gov.on.ca/en/taxchange/index.html

http://www.rev.gov.on.ca/en/services/onttaxs/index.html

http://www.rev.gov.on.ca/en/about/businessnumber.html


Federal

GST/HST

As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the HST at the rate of 13%. The HST rate of 13% includes the 5% federal part and 8% provincial part.


Canada Revenue Agency 1-800-959-5525www.cra.gc.ca

Before you register

Before you register, you need to know the following information:

Social Insurance Number

Business structure

Name of business

Location of business

Business activity

Representative/contact person

Obligations

Sales amount/reporting period

Fiscal year-end

Effective date

Accounting periods

The BN is a numbering system that simplifies and streamlines the way businesses deal with the federal government. It is based on the idea of one business, one number. Not all businesses require a BN and CRA program accounts.

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http://www.cra.gc.ca/


Payroll Deductions (Source Deductions)

As an employer, trustee, or payer, you are responsible for deducting Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax from remuneration or other types of income you pay, remitting them to us and reporting them on the applicable slips. After you have made the deductions, you have to remit these deductions, plus your share, to us. You then report the employee's income and deductions on the appropriate information return.

Income TaxAs an employer, you are responsible for deducting income tax from the remuneration or other income you pay. There is no age limit for deducting income tax and there is no employer contribution required.http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ncmtx/menu-eng.html

Canada Pension Plan (CPP)You have to deduct CPP contributions from an employee's remuneration if that employee:

Is 18 years or older, but younger than 70;

is in pensionable employment during the year;

is not considered to be disabled under the CPP or QPP; and

does not receive a CPP or QPP retirement pension.

As an employer, you must also contribute the same amount of CPP that you deduct from your employees' remuneration.http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/menu-eng.html

Employment Insurance (EI)

You have to deduct EI premiums from your employees insurable earnings on each dollar up to the yearly maximum.. As an employer, you must also contribute 1.4 times the EI premium withheld for each employee.Insurable employment includes most employment in Canada under a contract of service (employer-employee relationship).There is no age limit for deducting EI premiums.http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/menu-eng.html


Canada Revenue Agency of 21

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ei/menu-eng.html

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/menu-eng.html

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/ncmtx/menu-eng.html


1-800-959-5525www.cra-arc.gc.ca

Business Insurance

Needs for insurance will vary widely with the different types of businesses. Insurance coverage at some level is required by most businesses and is usually necessary as a condition of a loan from a financial institution. As a sole proprietor, having sufficient insurance coverage is especially important because you are personally liable for all debts.

For those of you that are starting a home-based business, your existing homeowner’s policy does not automatically cover business assets and operations. The latter also holds true for vehicle insurance policies.

There are several types of commercial insurance to consider for your business, some of which include:

Liability insurance

Home insurance

Vehicle insurance

Disability insurance

Property insurance

Contact an insurance broker to discuss your specific business insurance needs.

Industry Specific Contacts

For information on industry specific guides, please visit

Canada Business Ontario Service Centre:http://www.canadabusiness.ca1-888-745-8888

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http://www.canadabusiness.ca/

http://www.cra-arc.gc.ca/


Useful Internet Sites

General Information

Economic Partners Sudbury East West Nipissing Inc. www.economicpartners.comCanada Business Ontario Service www.canadabusiness.caBusiness Development Bank of Canada www.bdc.ca

Market Research

Canada Business Ontario Service www.canadabusiness.caStatsCan www.statcan.gc.caThe Corporation of the Municipality of West Nipissing www.westnipissingouest.caIndustry Canada www.ic.gc.ca

Others

Provincial

Ministry of Economic Development & Trade www.ontariocanada.comMinistry of Finance www.fin.gov.on.caMinistry of Revenue www.rev.gov.on.caNorthern Ontario Heritage Fund Corporation www.nohfc.comHealth Unit e-laws www.e-laws.gov.on.ca

Federal

Service Canada www.servicecanada.gc.caCanada Revenue Agency (GST/HST, payroll, etc.) www.cra-arc.gc.caCanadian Intellectual Property Office (patents, trademarks, etc.) www.cipo.ic.gc.caCanadian Boarder Services Agency (Import, Export) www.cbsa.gc.caStrategis – Industry Canada www.ic.gc.caFedNor – Industry Canada www.fednor.ic.gc.ca

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http://www.fednor.ic.gc.ca/

http://www.ic.gc.ca/

http://www.cbsa.gc.ca/

http://www.cipo.ic.gc.ca/

http://www.cra-arc.gc.ca/

http://www.servicecanada.gc.ca/

http://www.e-laws.gov.on.ca/

http://www.nohfc.com/

http://www.rev.gov.on.ca/

http://www.fin.gov.on.ca/

http://www.ontariocanada.com/

http://www.ic.gc.ca/

http://www.westnipissingouest.ca/

http://www.statcan.gc.ca/


http://www.bdc.ca/


http://www.economicpartners.com/


30 Front Street, Unit ASturgeon Falls, ON P2B 3L4

Tel: 705-753-5450 / 1-866-448-4478Fax: 705-753-3456

[email protected]

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