business building knowledge
What are some local resources in Revelstoke?
Visit the Revelstoke Business Resources page for a variety of supports/information for your business.
Do I need to register my business?
It depends on the structure of your business and what level of government you are “registering” with.
Let’s start with Revelstoke.
If you are intending to operate a business of any kind within Revelstoke, you must get a business licence from the city (even if you do not live in Revelstoke but wish to sell your products/services in a Revelstoke premise) There’s also an inter-community license if you want to sell your products or services in the surrounding areas. Visit: City of Revelstoke – Business Services
Now to Provincially.
If your business is to be operating under a name other than your personal name, you must register the name and register the business. This is a two-part process and before you do it, make sure you know what the structure of your business is going to be (see business structure FAQ’s below).
The first part is to submit a name request. This makes sure there are no duplication with registered corporations in BC visit: BC Registry – Name Request
Once you have an approved name, then you will register your business.
If registering as a sole proprietor or partnership, the easiest is to go through the OneStop Business Registry website.
If registering as an incorporated company, you are able to do a self-incorporation but our recommendation is that you use a lawyer.
And finally to Federally.
If you are planning to do business in any other province other than BC, make sure you check the requirements of each province you are operating in. Visit: Register my business Federally
When you register your business in BC, you will automatically receive your federal business number. Hooray! Something that was easy!
I am operating my business by myself. Should I be a sole proprietor, or should I incorporate my business?
There are pros and cons to each of these structures. Below is a quick overview of each. Note: this is not a comprehensive list, so reach out to StartUp to discuss more.
· Easy to set up
· All profits to owner
· Low cost
· Direct control of decisions
· May be difficult to raise capital
· Unlimited liability
· No name protection
· Limited liability
· Possible tax advantages
· Continuous existence
· Separate legal entity
· Easier to raise capital
· Name protection
· Expensive to form
· Closely regulated
· Extensive record keeping needed
I have a friend/spouse and we’d like to go into business together. How do we structure the business? Partnership or Incorporated?
Starting a business can be daunting, but you might have found someone that shares your passions, your vision, and your desire to start a business. How you structure that relationship will be one of the most important business decisions you make. Like any other type of relationship that you have in your life, a business relationship can be the greatest thing ever, or it could be the most challenging.
Below is a brief overview of each of these structures and some pros and cons.
A General Partnership is like a sole proprietorship, but with 2 or more people. You agree to combine your resources, share the management of the business and share the profits. How you do that and in what percentage is up to you. BUT, it’s critical that you have a partnership agreement in place that will say exactly how this will be done.
For example, you could decide to divide profits by responsibility. If partner A has more day to day responsibilities, your agreement could indicate that partner A will receive 70% of profits and partner B will receive 30%.
If there is unequal capital contribution, you might decide that since Partner A contributed $40,000 and Partner B contributed $10,000 that the profits would be divided proportionally and Partner A would receive 80% and Partner B 20%.
Or it could be a combination of both or anything you and your partner(s) agree to. In the absence of an agreement, the profits and the liabilities are shared evenly.
· Easy to form
· Low start-up costs
· Additional investment capital or skills
· Sometimes 2 heads are better than 1
· Unlimited liability
· Divided authority
· Possible conflict between partners
· Partners can legally bind each other without prior knowledge
An incorporated business is a legal entity that is separate and distinct from the owners (shareholders). A quick overview of share structures, salaries and loans you might want to consider if you incorporate your business with others. For more in-depth information go to the government website, visit Business Corporations – Canada
You’ll want to figure out the various classes of shares. Each class must layout if they are voting shares, if they have the right to receive dividends (profit), and the right to remaining property if corporation closes (is dissolved).
What about PST and GST?
Let’s talk PST first. There’s a whole list of items that need to have PST added, and lots that don’t. Your best resource is Small Business Guide to PST
Now for GST. Everyone talks about the $30,000 revenue line for collecting GST. This is correct. You MUST collect GST if your business earns more than $30,000 in revenue in 4 quarters. Note, this is NOT the same as a calendar year.
However, the government is more than happy if you register for a GST number and start collecting GST right away no matter what your revenue is. Why would you do this? Well, GST tax credits is why.
Once you have a GST number and you start collecting GST on your goods or services, you need to send this GST amount to the government (you can choose to do this on a yearly, quarterly or monthly basis).
However, if you have purchased goods and services related to the running of your business, you are able to claim an Input Tax Credit (ITC) against the GST you have collected. Let’s say that you have registered for a GST number and started collecting GST on your goods or services. The total amount collected for the month was $200. This amount needs to be sent to the government. However, you have also purchased eligible business supplies and paid GST of $100. Therefore, the amount of GST you send to the government will be $100 ($200 GST collected – $100 GST paid = $100 GST amount sent to government).
In some cases, it makes sense to register for a GST number and start to collect GST right away especially if you have high start-up costs or operating costs associated with your business. There are always exemptions to ITC’s, so always check with your bookkeeper or accountant to make sure you are doing the right thing.