Legalities for Canadian entrepreneurs

We spoke with Canadian entrepreneurs when developing our small business education, and they identified legalities, applications, documents and filing as a major area of concern. They told us stories of getting hit with fines and lump sums of taxes due that they didn’t see coming.

So learn from these entrepreneurs! Here are some legalities to make sure you keep in mind in your entrepreneurship journey:

  • Don’t forget to check your renewal dates, and mark them in your calendar so you don’t forget. Don’t get hit with late fees and fines.
  • Don’t think that getting a business number is enough. Almost all businesses require some form of license or permit. Check out which ones you need, and then double- and triple-check.
  • Don’t assume you’re covered. You may want to set aside some money in case there’s something you missed. These large lump sums that come out of nowhere can really dent your company’s cash flow.
  • Don’t think that you can navigate legalities alone. It never hurts to have an experienced professional take a look over which licenses, permits, contracts and policies you have in place in order to make sure that you’re covered.
  • Don’t think that the rules don’t apply to you or your business. You can’t hide – they will find you. Remaining compliant will remove stress and help your business run smoother.
  • Don’t leave it to the last minute. The application and assessment processes can sometimes take a long time, and how annoying would it be to postpone opening day over a pending license or permit?
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Entrepreneurs: Don’t get sued

tech business

When it comes to small business rules, regs and legalities in Canada, it can be confusing to know where to even begin to stay compliant. Thankfully, we’ve helped thousands of Canadian entrepreneurs stay on top of all the paperwork required to run a small business.

Permits and Licenses

As a business owner, it’s important to make sure from day one that you have all of the required licenses in place before opening your doors. Without them, you could be facing some pretty hefty fines. A license signifies that you are permitted to operate in your area, while a permit is a document that shows proof of compliance with certain laws. The permits and licenses that are required for your company will not only vary by industry, but also by city and province. You may require a municipal and provincial license to operate your business. Most businesses need a license of some sort to operate. License fees are required, so be sure to budget for this, especially for signs and company vehicles.

Industry Canada runs an online service called BizPal which helps you find the licenses required for your operation within particular areas of Canada. You may also be required to contact local authorities like Development and Building Approvals, Health Services, Fire Department, Gaming and Liquor Commission, Police Services, and Motor Vehicle Industry.

Business Number (BN)

A business number (BN) is something you’ll need for GST/HST, payroll, corporate income tax, import/export or other (registered charity, excise tax, excise duty, insurance premium tax, or air travellers security charge) business accounts with the Canada Revenue Agency. When registering your business, you will be assigned a business number. This business number will have 15 digits, consisting of two parts: the registration number and the account identifier. Your account identifier may be either RT (GST/HST), RP (Payroll Deductions), RC (Corporate Income Tax), or RM (Import/Export) and will be followed by a 4-digit account reference number. You’ll need your business number when making payments or enquiries related to your account. While the whole thing might sound complicated now, registering for your business number is easy — it can be done by phone, internet, fax or mail.

Rules and Regulations

Some of the most important regulations you’ll need to follow will be the local bylaws that may affect your business operations. Examples include smoking bylaws and alarm system bylaws. Bylaws may be updated and renewed often, so keep up to date on this information. For details about the regulations of your area, contact your provincial, town or rural municipal office.

Other regulations that must be followed include land use, zoning and building regulations. Be sure that your company complies with zoning and building regulations before committing to any land use or renting. Zoning is actually often a prerequisite to licence applications. Watch for any additional taxes you may have to pay for your business, including a business tax for companies operating in their own facilities. The Government of Canada provides some excellent guides to starting specific types of businesses, including many of the required rules and regulations, on their website.

Product or Service Liability

Product or service liability refers to the extent to which your company is obligated to make compensation to your customers for loss related to personal injury, property damage or other harm caused by the product or service that you offer. Things that you could be liable for include negligent packaging or product design; failure of the product to be safely used for the purpose it was intended for; environmental damage; failure to adequately warn against misuse; or inadequate product or service testing. Service companies can experience liability due to failure to fulfill requirements or inadequate performance. Be sure to speak with a lawyer to develop strategies to protect yourself from potential lawsuits. Insurance policies often include a general liability policy that can help protect your company.

More about government compliance

For more info on things you’ll need to keep things above board, check out our online small business training, and these blog posts:

Types of business insurance

Intellectual property protection for small businesses

What you can do about small business fraud

Small business legal issues: Tips from entrepreneurs

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Home-based business permits and expenses

Depending on your setup, working out of a home office can feel miles away from any other office job you’ve had. You get the freedom to set your own hours, run out for a couple of hours to pick up some groceries, and your commute time is absurdly low. However, if you run a home-based business, you may also feel like you’re on your own when it comes to proper small business government compliance. What expenses can you claim with your home-based business? What permits do you need to run a business out of your home? Ack!

Fear not! At GoForth Institute, we’re entrepreneurs like you, and we’re all experts in our field. We’ve got an ever-growing database of small business articles and expert Q&A from home business owners who are confused about governmental rules and regulations too. Check out the following quick and informative reads about home-based business government compliance.

Do you have a question about governmental rules and regulations about your home-based business? Leave us a comment, or ask a GoForth expert and help entrepreneurs just like you!

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