Starting a Business in Canada

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No nonsense information on small business.

Aug 25, 2011 - 2 minute read - Comments - legal

How To License A Business In Edmonton

This post will provide you with information on how to license your business in Edmonton. This is different than registering a business name or incorporating a business.

All businesses in Edmonton need a business license and a development permit. The business license shows the public that your business is permitted to operate in Edmonton. The development permit verifies that a specific business activity is allowed in a certain location. A business license and a development are applied for as part of the same process.

A business may require additional licenses and permits, depending on the activities of the business. For example, lounges and bars would need additional approvals from the Alberta Gaming and Liquor Commission, Alberta Health Services and Fire Rescue Services.

The best way to tell which permits and licenses you’ll need is to use BizPal. BizPal is an Industry Canada website that has partnered with local jurisdictions to centralize information on business licenses and permits. It will take you through an interview process where it asks you questions about your business and it will give you a list of licenses and permits you should apply for.

A development permit for a minor home based business (has less than one business visit per day) is $104.00 and for a major home based business (has more than one business visit per day) is $260.00. The average cost of a home based business license is $198.00.

The cost of a commercial business license varies depending on the type of business. To give you an indication of the cost, a business license for a general business is $198.00.

The cost of a commercial building and use application will vary depending on the type of business and the nature of its activities. A development permit approves the location, size and use of a building. You can check the zoning of your location online.

The City of Edmonton has a website where you can apply for a business license. Home based businesses have a slightly difference process where they can apply online for a home based business development permit.

The approval process will usually take only a few days. There can be considerable fines for not registering your business so make sure you get this done as part of your startup process.

Aug 24, 2011 - 2 minute read - Comments - legal

How To Apply For A Business License in Calgary

This post is about applying for a business license to operate a business within Calgary. This is different from incorporating a company or registering a name for your business. Most cities require a license to operate and this is the process to get registered in Calgary.

Most businesses will require a license. In addition to those with a commercial location, this applies to most home based businesses and people that provide a service without a fixed commercial location. If you are in doubt about whether you need a license or not you could check the city’s business registration site. This site will ask you questions about the business you plan on starting and it will give you recommendations as to which license you may need.

The City of Calgary also participates in Industry Canada’s BizPal website.BizPal is an effort to centralize licensing and permitting information for jurisdictions across the country. I find the BizPal website to have a better user experience and I would recommend it over the city’s own system.

The fee for licensing a new business is currently $146 plus any additional fees that your particular business might have to pay. For example a restaurant would have additional fees for fire inspection, police review and planning approval. These other inspections and reviews must be in place before you will be granted a business license.

You can apply for a business license in person, by phone, by mail, by fax or by email. A business license application form can be downloaded in PDF format from the city’s website.

Aug 23, 2011 - 3 minute read - Comments - legal

How To Incorporate a Business In Alberta

This post is about registering a provincial corporation in Alberta (For the difference between a federal and a provincial corporation see our previous blog post). There are a number of advantages to a federal corporation. If you plan on doing business in other provinces, you should strongly consider federal incorporation.

The first step to registering your business as an Alberta provincial corporation is to see if the name you have chosen for your business is available. You cannot name your Alberta corporation the same name as an existing Alberta corporation.

Unless you choose to have your company given a numbered name (known as a “numbered company”, ie. 1234567 Alberta Ltd.) you will need to conduct an NUANS (Newly Upgraded Automated Name Search). For a federal corporation this can be done online through Industry Canada’s website, but for a provincial corporation you should use an Alberta based search provider. A list of online NUANS name search service providers can be found here. The cost for this name search will be about $25 but the price may vary as service providers add their own fees on top of the government’s fees for providing this service. This search is only good for 90 days so don’t do it too far in advance of submitting your Articles of Incorporation.

Corporation Structure

After naming your corporation, the next step is to decide on a corporate structure. This is one of the most complex parts of incorporating. A corporation that isn’t set up properly at the beginning can create problems down the road. You have to make decisions regarding:

  • Share structure
  • Any restrictions on the transfer of shares between different parties
  • The number of directors in the corporation
  • Any restrictions on the type of business that the corporation may conduct
  • Any other rules or provisions that you wish to include

Corporation Type

There are three types of corporations. They are distinguished by the number of shareholders and the way shares are bought and sold.

  1. The most basic form of corporation has 15 or fewer shareholders and shares are not publicly traded. This is the category most small businesses will fit into.
  2. Corporations with 16 or more shareholders but who do not sell shares to the general public have extra regulatory requirements. They must comply with specific provisions of the Business Corporations Act.
  3. Corporations with 16 or more shareholders that do distribute shares to the general public are subject to an even higher level of regulation where they must file documentation with the Alberta Securities Commission.

Consider Using A Lawyer

While it is possible to incorporate your business by yourself, unless you have a lot of experience in this, I wouldn’t recommend it. Filing the Articles of Incorporation is easy enough but creating good documents that include all of the information you need can be very difficult for a layperson. I recommend hiring a lawyer to do this for you (You can search for a lawyer here.) Lawyer’s fees are normally worth the expense because doing things right at the beginning can save you a lot of money later on.

If you are on a tight budget and don’t feel you can afford the fees, I recommend using a service like Legal Zoom.ca. They won’t give you service and advice tailored to your personal situation like a lawyer would but they’ll give you a good set of basic documents. A lawyer or an online incorporation service can also do the name search for you.

Incorporating a company can seem like a big, complicated process if you’ve never done it before but it really isn’t that difficult, particularly if you use a lawyer or a service to do it for you.

Aug 22, 2011 - 2 minute read - Comments - legal

Registering a Business Name in Alberta

It’s important to note the difference between a business name and the name of a corporation. A corporation is a distinct legal entity that will have a legal element such as Ltd., Inc. or Corp in its name. A business name is used by a sole proprietorship or a partnership as the name under which it is “doing business as”. Sole proprietorships and partnerships are not separate legal entities from their owners.

While there is no restriction on two sole proprietorships or partnerships having the same name, no two Alberta corporations can have the same name. Limited Liability Partnerships (LLP) are treated differently from regular partnerships as no two LLPs can have the same name in Alberta.

If you are doing business under a name other than your own personal name, you should register that name with the Provincial Government. This will be required by the bank before you can open a bank account. They will not let you deposit cheques made out to the business’s name otherwise.

The process of naming a business can be quite important as it will have long-term implications for your marketing and branding. There are also legal considerations that must be taken into account. If your business’s name is too close to that of an existing business or a trade-mark, you could wind up defending your choice of business name in court.

It’s best to avoid all of this by conducting a name search and by making sure that your business name is as unique as possible. A sole proprietor would register a trade name for his or her business. A partnership would register itself and its business name.

The Alberta Government has contracted out the business name registration process to a number of authorized service providers . Any authorized service provider will be able to provide basic business name registration services. Registering a business name is one of the steps of starting a business in Alberta. It’s a rather simple process that sole proprietors can do for themselves. Those of you who are registering a partnership or a corporation might want to have your lawyer handle the process for you in addition to drafting a partnership agreement or articles of incorporation.

Aug 17, 2011 - 3 minute read - Comments - legal

What You Need to Know About Trade-Marks In Canada

Trade-marks can be important. They can form an essential part of a business’s branding effort. It is not necessary to register a product name or a logo to establish a trade-mark because use of a name or a logo for a certain amount of time can establish a trade-mark under common law. However, it makes things much clearer if a company registers its trademarks. This is because a registered trade-mark is considered prima facie (direct) evidence of ownership.

What this means is that if someone wants to challenge a registered trade-mark, it falls upon them to prove the owner does not have ownership. If a trade-mark is unregistered, it falls on the supposed owner of the trade-mark to prove that they have established the right to it. This shift in the burden of proof can mean considerable time and lawyer’s fees for the trade-mark owner. For this reason alone, it makes sense to register your important trade-marks.

A trade-mark can be registered as long as it doesn’t contravene the Trade-marks Act. Some of the things that can’t be registered include:

  • names and surnames - John Smith or Smith, Jones and Johnson Partners cannot be registered as a trade-mark. There could an exception to this if you could prove that the name has transcended the person in the eyes of the public (think Walt Disney).
  • clearly descriptive marks - This is to prevent the use of adjectives and adverbs so that they can be available for general use. For example, Smith’s Fresh Orange Juice couldn’t be trademarked because “fresh” is a common adjective.
  • deceptively misdescriptive marks - Your trade-mark has to accurately represent your product. You couldn’t register Bob’s Organic Foods if the food was not in fact, organic.
  • geographic locations that describe the origin of a product - You could not trade-mark Saskatchewan Wheat for example, because it would give you an unfair advantage over all of the other wheat growers in the province.
  • words or designs that are too close to an existing trade-mark
  • words or designs that resemble a prohibited mark - You can’t register a trade-mark that comes too close to a wide variety of government and official symbols. In other words, no Canadian flags in your logo.

These are just some of the prohibitions that will get your trade-mark application denied. Most of these are common sense. If you are unsure as to whether your proposed trademark violates the rules, check with the Canadian Intellectual Property Office before filing your application.

Companies, individuals, partnerships, trade unions, and lawful associations can apply for trade-marks. A registered trade-mark lasts 15 years, which can be renewed every 15 years after that with payment of a fee.

To file a trade-mark application, it currently costs $250 online and $300 otherwise. A certificate of registration will cost an additional $200. As you can imagine, there are an assortment of fees for various forms of paperwork and other requests.

Many businesses choose to use a trade-mark agent to navigate them through the process. Registering a trade-mark can be a tricky process. There are no forms for registering a trade-mark. Applicants are asked to create their own application. For this reason alone, the extra cost of having a trade-mark agent do the work for you might make a lot of sense. A list of trade-mark agents can be found on the government’s website.

It can be difficult to decide whether the time and expense is worth the effort to register a trade-mark. If you market products or services that are heavily reliant on branding to differentiate them in the marketplace, you should give the idea of registration strong consideration.

Aug 16, 2011 - 3 minute read - Comments - business planning

How To Start A Business In Ontario

If you’re thinking of starting a business, the guide that follows will give you an overview of the steps you need to take to get up and running. Like all big projects, things are more manageable if you break them down to a series of smaller tasks. There will obviously be differences depending on where you are located in Ontario, but whether you are in Toronto or Thunder Bay, the overall process will be very similar. The steps that follow could be changed around slightly, depending on your approach to the process, but in general work through the steps from top to bottom.

The Business Idea

  • Think about whether you are ready to be an entrepreneur. Talk to your immediate family members to make sure you have their support. You don’t want to enter into a new business with along a reluctant spouse. (See our post on entrepreneurial attributes)
  • Evaluate your business idea. Does it require a new business model or are other businesses currently operating successfully using this model? (See our post on business models)
  • If you have a new business model conduct a feasibility study to confirm your idea is sound. (See our post on feasibility studies)
  • If your business is operating under a proven business model, conduct preliminary research to make sure that the business makes sense given your skills and finances. Make sure it makes sense for the market. (See our post on initial research)
  • If the your initial research or your feasibility study shows that your business idea has a reasonable chance of succeeding, continue to the next step, otherwise, go back to the idea stage.

Business Plan

Banking and Financing

Put Your Plan Into Action

  • Apply for a business license and any other licenses you need to operate your business. The Ontario Government participates in a website designed to handle this called BizPal. Not all municipalities participate in this service but it’s probably the best place to start. The site will ask you questions about your business and then suggest a list of licenses and permits to apply for.
  • Start implementing your business plan. Depending on your circumstances, this could mean signing property leases, buying and installing equipment and generally getting your business ready to open to the public.

As you can see, when a large project such as starting a business is broken down into smaller tasks, things become more manageable. If you feel like you need more information on parts of the process or if you would like us to cover additional tasks not on this list, please leave a comment below.