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