In this blog, we’ll show you how to set up a sole proprietorship in Manitoba, Canada. We cover bookkeeping, taxes, and registering your business.
If you’re trying to move your business plan from idea to reality, you’re most likely deep into Google. Don’t worry, we’re here to save you from your most recent internet tail-chase. To keep you from running in circles, we’ve compiled everything you need to know in this blog. From licensing to insurance to registering a sole proprietorship in Manitoba, we’ve got your answers.
Naming your sole proprietor business
Pick a name
When it comes to a name, choose one that appropriately represents your services. There are a few areas to consider when picking a business name for a sole proprietorship in Saskatchewan. Keep in mind that submitting a name request for a partnership or sole proprietorship doesn’t secure the name’s availability if you incorporate later. Manitoba’s Companies Office has a great guide for choosing a business name.
Check to see if it’s been taken
Once you have an idea of what you’d like your name to be, you’ll need to check to see if it’s suitable and available by submitting a name search. If you plan on running your business under your legal name only, you don’t need to submit a name request. You can search your name under the Companies Online database or the Canadian Trademarks Database.
Why should you search the database?
- To ensure that your name, or a similar one, isn’t already being used by another business.
- Reduce confusion in the marketplace.
Reserve your business name
Next, you’ll need to reserve your business name with the province. If you’re using your full legal name only, you’re not required to reserve or register your business name. You must have a Companies Office Online log-in to complete this process. Once you have access to that, you can follow these simple steps to reserve your business name. Keep in mind that you have 90 days once your name is reserved to register it.
Registering a sole proprietorship in Manitoba
A sole proprietorship in Manitoba can operate without registering only if the business runs under the legal name of the business owner. If you’d like or need a business license, then you’ll need to register with the province first.
How to register
To register your sole proprietorship in Manitoba, follow this link and click “File Online” under the form “Business Name Registration”. Here, you’ll have the choice to register as a sole proprietor which will give you access to a 9-digit business number. Having a business number can be an important part of being a business owner. It gives you an identifier if you need to create a CRA account or decide to incorporate later.
Does a sole proprietor in Manitoba need a business license?
It’s suggested that you use BizPaL to find out what kind of licenses and permits you’ll need. BizPaL is a platform that filters permits based on your location, industry, and business activities.
What you might need to apply for…
Find out if you need to register for anything else before you get started.
WCB
If you’re planning on hiring one or more staff members, then you’re required by law to register for the Workers Compensation Board of Manitoba (WBC). This includes full-time, part-time, casual, or contract workers. Visit the WCB site for more information about who needs coverage.
RST
Find out if your business is required to apply for Registered Sales Tax (RST) in Manitoba. RST is a 7% tax applied to most goods and certain services and is calculated on the selling price before GST is applied.
CRA
A CRA account is necessary to meet certain tax obligations and receive certain benefits, rebates, and refunds. For example, you’ll need to register with the CRA for GST remittance and payroll deductions. If your sole proprietorship has no employees and is not required to register for GST, you do not need a CRA account.
GST
As a sole proprietorship in Manitoba, you are required to register for GST if you are not a small supplier or if you make taxable sales, leases, or other supplies in Canada. Find out if your business applies on this Government of Canada page.
Are you a small supplier for GST purposes?
A small supplier is defined as someone whose revenue (and revenue of persons associated) from worldwide taxable supplies is equal to or less than $30,000 in a single calendar quarter and over the last four consecutive calendar quarters.
Keep track of your money
A sole proprietorship in Manitoba is not legally obligated to open a separate business bank account. However, having a separate account has lots of perks. It helps you keep your finances tidy, understand growth, and makes it easier to file your personal and business taxes. In the end, keeping your business and personal deposits and transactions separate allows for happy books.
Organize your income and expenses
The best way to track your income is through QuickBooks Online. Doing this correctly gives you important information, like when to start charging GST. The best way to ensure your QuickBooks is on track is through LearnQBO. You can learn how to set your QuickBooks up for easy and accurate bookkeeping.
Before you get into the thick of it
Start the general set-up. Add your clients, products/services, and any other information that will make your job easier in the long run. This helps you track how much you make and spend on each product or service and keeps your clients organized.
Does a sole proprietor need insurance?
Consider setting up business insurance to cover yourself from any claims or property damage. A sole proprietorship in Manitoba has the same legal responsibilities and liabilities as large corporations. Any claims against your business such as someone injuring themselves on your property could result in destructive legal fees. Researching what insurance you require is always a good idea before committing.
Cover all bases with a contract
Although you want to think everything will run smoothly, you should be prepared for difficulties. Save any miscommunications with a customized contract for your services. Have your client agree and sign your terms before you start a project or partnership. You might be able to find a free contract template online, but we suggest chatting with a lawyer to get one drawn up. Like we said before, better safe than sorry!
Visit Learn QBO for more bookkeeping tips and easy QuickBooks Online courses.