Business numbers are used by the Canadian Revenue Agency for tax purposes. What exactly are they and which businesses are required to have one?
In order to conduct business, both provincial and territorial governments require that you register with them. As a startup you will need to obtain a business number, also known as a BN, in order to be able to undertake your business activities. A business number is a unique nine digit number assigned by the Canada Revenue Agency (CRA) to identify each specific company for tax matters related to business in Canada. Furthermore, a business number allows businesses and other organizations to simplify their dealings with one another, as well as with all levels of the public sector. Whether you are the sole proprietor of your startup, in a partnership, commencing a corporation, trust, or other ownership type, you will be assigned a business number which you will need in order to file taxes, communicate with the CRA, and other administrative purposes.
Before commencing registration for your business, you will need to make some key decisions about your startup and be ready to sign up with your information. For example, you will need to know what you want to name your startup; provide the physical location and mailing address of your business plus decide what the legal structure should be, such as sole proprietorship or partnership. You should note that, if you decide to register as a sole proprietor or as a partner in a partnership, you will continue to use your social insurance number (SIN) to file your individual income tax return, even though you may have a BN for your GST/HST, payroll, and import-export accounts.
There are many advantages to registering, such as the ability to claim input tax credits for the GST/HST you pay on your business's startup expenses. Also, if you choose to open an import-export account prior to importing or exporting goods into Canada, this will avoid delays at the port of entry. In addition to this, it is a good idea to open a payroll account if you know you will have employees. This will allow you to make regular deductions.
It is very easy to register for a business number. The simplest manner is to visit Business Registration Online (BRO); but you can also register by telephone at 1-800-959-5525, by mail or fax. If you chose to register online you can register for CRA program accounts and provincial accounts at the same time which will save you time and duplicated effort, as BRO links to the business online registries of some provincial programs for British Columbia, Ontario and Nova Scotia. Furthermore the secure and encrypted online service is available from your home, office, or anywhere in Canada at any time of day.
Once you have registered, your startup will receive confirmation and be given your business number. If you register by telephone or online you will be provided with your BN, and the registered program accounts. If you register by mail, the CRA will send you a letter confirming your BN, the program accounts you registered, and a summary of the information you provided.