With the exception of a few isolated cases, usually related to broadcasting or telecommunications, there is no federal or provincial licensing system for businesses. However, sometimes new businesses, such as medical colleges, are subject to licensing or certification by professional organizations.
Municipal Licensing.
Licensing really only applies at the municipal level. Municipalities issue business licenses to generate revenue and ensure that licensees comply with zoning requirements.
However, in many cases, such as home-based businesses, business licensing does not apply. But if your business is opening an office or performing a function that is disruptive to your neighbors, you will most likely have to do so in a designated area, and therefore will require a municipal business license.
Environmental and zoning permits
Most businesses that impact the environment or handle hazardous materials require federal and provincial permits. All operators of new businesses should understand their area of operation well enough to understand what permits are required.
Some municipalities require zoning and building permits for certain types of businesses. Of course, this is true for any type of building or structure. You may also need sign and access permits.
Federal business registration.
Businesses earning less than $30,000 per year usually don’t have to register to pay GST/HST and probably don’t have to register with the federal government. However, businesses of a certain size, businesses with employees, and businesses engaged in certain activities must register with the Canada Revenue Agency (CRA) to participate in the following programs:
Goods and Services Tax (GST) or Harmonized Sales Tax (HST)
Payroll taxes, such as contributions to the Canada Pension Plan
Corporate income tax
Duties on the import or export of goods
Registered charitable activities
Excise tax
Tax on insurance premiums
Airline Passenger Safety Fee
To register for any federal government program, a company must first obtain a company number from the CRA.
Registering Your Name
Many sole proprietorships and partnerships voluntarily register with their provincial government to provide some limited protection for their business name and to increase the credibility of their business.
Registration carries no legal requirements or tax consequences. It is done through a government agent or online at a local community operator. Usually before registering a business, the agent does a name search to make sure there is no conflict with the existing business.
When companies register, they are given a government charter to operate, so these functions are done automatically.
Provincial registration.
A number of provinces also require businesses to register to comply with provincial tax regimes. Alberta and the territories have no sales tax, other provinces have aligned their sales tax with the federal government, while others have retained their independent provincial sales tax. The business owner must determine which treatment applies to his or her company.
There are other rules about which businesses must register with their provincial or territorial government depending on where you live, including at what income level you must start collecting provincial sales tax. You can visit the Canada Business Network website for more information about registering in Canada.