In this blog, we’ll show you how to set up a sole proprietorship in Alberta, Canada. If you’re still in the “idea” stage, head to our blog which covers the first few steps in planning your business model.
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 Alberta, we’ve got your answers.
Naming a sole proprietorship in Alberta
In most provinces and territories, businesses need to be registered to operate. It’s best to check the requirements of the province or territory in which you plan to do business for more information. Keep reading if you’re planning on registering in Alberta.
Pick a name
When it comes to a name, choose one that appropriately represents your services. There are a few areas to consider when choosing a business name in Alberta. Keep in mind that submitting a name request for a partnership or sole proprietorship in Alberta doesn’t secure the name’s availability if you incorporate later. The government of Alberta site outlines types of business names and how to choose the best one for you.
Get a business name report
Although this step is recommended, it’s not necessary when naming your business in Alberta. This step simply ensures that you aren’t choosing a name similar to another business. You can check business names in Alberta (or any province) by using the Government of Canada search engine.
Register your name
Next, you’ll need to fill out the appropriate paperwork to let Alberta know your new business name. Use this form to share your information, then take it to a Corporate Registry service provider. You’ll also need your business name information, business name report (if used), a valid ID, and a fee payment.
From here, you’ll be entered into the Corporate Registry and will receive proof of filing. You’ll then receive an email when your federal business number is issued unless you have previously been assigned one as an individual. In that case, use the one previously assigned.
Getting a business license for a sole proprietorship in Alberta
This government of Alberta site outlines all business models that require a license to operate. If you’re still unsure of what licenses you need, try BizPaL. This platform helps you find the permits and licenses you need to operate.
Should you apply with the Workers Compensation Board?
If your business uses any type of employee – full-time, part-time, seasonal, etc – you’ll have to register with Alberta WCB. This should be done within 15 days of hiring your first worker. Make sure you’re also covered! When you register your workers with WCB, only they are covered. Find personal coverage here.
A CRA account is necessary for a sole proprietorship in Albertato 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.
When to sign up for GST
Alberta doesn’t charge HST or PST like other provinces, so the only thing you should think about is GST. 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?
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 proprietor 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 proprietorship in Alberta need insurance?
Consider setting up business insurance to cover yourself from any claims or property damage. A sole proprietorship in Alberta 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 which insurance you require is always a good idea before committing. Visit this Business Link website for more guidance for your small business in Alberta.
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!
Check out Learn QBO for tips on bookkeeping and fun, easy QuickBooks Online courses.