Starting a business in Canada implies following several steps, among which some are mandatory, while others are not. Obtaining a business number (BN) can become mandatory for companies in certain industries, while for others it needs not to be obtained. The business number is also known as the tax ID number of a company.
Below, we have prepared a guide on how to apply for a business number (BN) when registering a company in Canada.
If you want to open a company in Canada and need assistance in obtaining a business number, our local consultants help you. We can also assist with the company registration procedure in Canada.
The business number of a Canadian company
The business number is a unique code which can take different forms and can be used for completing various activities with government agencies. The business number can also be used instead of the company’s name, or in other words, upon the incorporation of a company, the business number will replace the procedure of obtaining a trading name for the company.
Our Canadian company formation specialists can offer more information on the business number and the legislation which provides for registering companies in this country.
When is the BN number mandatory?
There are several situations in which the business number is mandatory for Canadian companies. Among these, we mention the following:
- when registering a company at a federal level in Canada, the BN is mandatory;
- when registering a company online with the Business Registration Online portal, the BN will be assigned automatically;
- when accessing CRA (Canada Revenue Agency) programs or accounts, the BN is mandatory;
- provinces like British Columbia, Manitoba, Ontario and Nova Scotia require companies to apply for BN numbers;
- when changing the business structure, a new business number must be obtained.
If you are interested in setting up a business in Canada, our representatives can assist with the incorporation procedure at both federal and provincial levels.
CRA accounts which require BN numbers
The Canadian Revenue Agency requires local companies to use their business numbers when completing specific tax operations. Among these, Canadian companies which collect the Goods and Services Tax (GST) or Harmonized Sales Tax (HST), companies benefitting from payroll deductions, companies paying the corporate tax and companies involved in import-export activities are required to obtain the business number.
Procedure for obtaining the tax ID number in Canada
The BN number is assigned to a company upon registration. The CRA assigns the number when a company registers for taxation purposes for the first time. The BN number has the following structure:
- a 9-digit code which represents the business number;
- a 2-letter identifier which represents the program type the company registers for;
- a 4-digit reference which represents the program account.
The business number can be obtained online or by filing Form RC1 (Request for a Business Number).
Our company registration advisors in Canada can help you obtain a BN for your company.
Special requirements for the BN of a Canadian business
There are a few special requirements which need to be taken into account when requesting the BN for a business in Canada. Sole traders, for example, must obtain a separate tax ID for each of the activities completed, if the person carries out multiple activities. A single BN can be obtained only if the sole trader is engaged in a partnership.
For companies registered at a federal level, the BN number is issued by Canada Industry upon the incorporation with the Trade Register. Following that, the companies need to register with the CRA for the programs and accounts corresponding to their activities.
For complete information on how to obtain a tax ID number, you can ask our company formation agents in Canada.
Canada economic facts
Canada is one of the largest economies in the world, 2019 representing a good year until this moment. Even if the Canadian economy increased at a slower pace, it did register an overall 0.4% growth by May.
Since the start of 2019:
- Canada registered a 0.4% economic increase during the first 3 months of this year, compared to the same period of last year;
- the first quarter of 2019 brought a real Gross Domestic Product (GDP) increase of 0.3% compared to the last quarter of 2018;
- imports increased by 1.9% in the first quarter of 2019, while exports dropped by 1% compared to the same period of last year;
- Canada registered an increase of 8.7% in business investments in equipment in the first quarter of 2019 compared to the same period of last year.
For assistance in obtaining a BN or starting a company in Canada, please contact our representatives.