A Business Account Number is used by the Canadian government to track a number of activities related to your business. Think of it like a social insurance number for your business. If you incorporate a new business at the federal level, you will automatically be issued a business number. The business number is the basis for a number of the accounts that the Canada Revenue Agency keeps track of. These take the following format.
You can register for a Business Number online but before you do, it will be helpful to have this information at hand.
- Social insurance number (SIN)
- Business structure
- Name
- Location
- Business activity
- Contact person
- Sales amount / reporting period
- Fiscal year-end
You will require a business number to register for GST/HST number if you:
- Have revenues exceed $30,000 in a single calendar quarter or in four consecutive calendar quarters
- You are a non-resident and make make taxable sales of admissions in Canada for a place of amusement, a seminar, an activity, or an event held in Canada, even if your sales do not exceed $30,000
- you host a convention in Canada, and more than 25% of the delegates are residents of Canada
- you solicit orders for publications to be delivered to customers by mail or courier in Canada
- You operate a taxi/limousine service and your fares are regulated by federal or provincial laws, regardless of your annual revenues.
For most of the readers of this blog, the first point is the one to pay attention to. This works out to $120,000 annually on a gross revenue basis, which isn’t very much in today’s world. The bottom line is that most businesses will need to registered for GST/HST. If you are unsure if you meet the requirements, the government has a website that has a questionnaire that will let you know whether you need a GST/HST account. Setting this up is more straightforward than it looks but knowing if your product is taxable under the GST/HST might be difficult to determine. It’s a good to know about how your business interacts with the government but if you are ever in doubt, it is best to talk to your accountant.