How to Start a Sole Proprietorship in British Columbia?: Process, Pros & Cons

Establishing your own business in British Columbia (BC) is a exciting journey toward independence and financial freedom. If you’re a freelancer, consultant, or small business owner searching for the easiest method to get started, a sole proprietorship is the best option.

This article walks you through the steps to register a sole proprietorship in British Columbia, Canada, with the latest process, costs, and voice-optimized answers to common questions people ask online.

What is a Sole Proprietorship in British Columbia?

A sole proprietorship is the simplest kind of business ownership in British Columbia, Canada. It means one person owns and runs the business, and legally, the owner and the business are the same entity.

In simple terms:

• You control all business decisions.
• You keep all profits.
• You’re personally accountable for any corporate debts or legal obligations.

You might not be required to register your business if you use your own legal name, such as “Ava Patel.” However, you must register your single proprietorship with the BC government if you wish to utilize a commercial name (such as “Ava’s Fitness Coaching”).

Why Register a Sole Proprietorship in BC?

Here’s why registering your business name is beneficial:

• Builds Credibility: Operating under a registered business name looks more professional.
• Legal Compliance: Registration ensures you meet provincial regulations.
• Tax Readiness: You’ll automatically receive a Business Number (BN) for tax purposes.
• Easier Growth: You can apply for licenses, open a business bank account, and register for GST/HST or PST.

Step-by-Step Process to Register a Sole Proprietorship in British Columbia

Let’s break down the process of registering your sole proprietorship in BC.

Step 1: Choose Your Business Name

Decide whether you’ll operate under:

• Your legal name only – Registration may not be required.
• A unique business/trade name – Registration is required.

Tip: Select a name that is easy to remember, straightforward, and pertinent to your company.

Step 2: Submit a Name Request

You’ll need to reserve your desired business name before registration.

• Visit the BC Registries Name Request portal.
• Give a maximum of three possible names.
• Pay a $30 name reservation fee.

Once approved, you’ll receive a Name Request Number to use during registration.

Step 3: Register Your Sole Proprietorship

Once your name is approved, you can register online through the BC Business Registry.

You’ll need to:

• Use your BCeID or BC Services Card to log in.
• Choose “Register a Partnership or Sole Proprietorship.”

Enter details like:

• Business name and address
• Nature of business (NAICS code)
• Start date of operations
• Pay the $40 registration fee.

After submission, you’ll get a Business Number (BN) from the Canada Revenue Agency (CRA), which is needed for tax filing as well as licensing.

Our experts from OnDemand International can assist you in setting up your business in British Columbia. 

Step 4: Apply for Tax Accounts and Licenses

Based on your commercial activities, there may be a need for:

• GST/HST registration: If your annual sales exceed CAD 30,000.
• PST registration: For businesses selling goods in BC.
• Municipal business license: Most cities in British Columbia (like Vancouver or Surrey) require one.

You can register for these accounts through the OneStop Business Registry.

Step 5: Maintain Your Business Records

Even though a sole proprietorship is simple, keeping your books in order is essential.

• Maintain separate bank accounts for business transactions.
• File your taxes annually using Form T2125 (Statement of Business Activities) along with your personal T1 return.
• Keep copies of invoices, receipts, and business licenses.
• Renew your municipal business license each year.

Pros and Cons of a Sole Proprietorship in Canada

Advantages

• Easy to Start: Simple registration and minimal paperwork.
• Low Cost: Cheapest business structure to set up.
• Full Control: You make all decisions independently.
• Tax Simplicity: Income reported on your personal tax return (T1).
• Flexibility: Ideal for freelancers, contractors, and consultants.

Disadvantages

• Unlimited Liability: Legal troubles and company obligations are your own responsibility.
• Limited Financing Options: It’s more difficult to get business loans or investors.
• Less Credibility for Larger Deals: Some businesses would rather work with incorporated organizations.
• Higher Taxes at Scale: Personal rates, which might be higher than corporate rates, are applied to profits.
• No Continuity: The business ceases if you retire, sell, or pass away.

Conclusion

Setting up a sole proprietorship in British Columbia, Canada is a practical first step toward entrepreneurship. It’s quick, inexpensive, and allows you complete control over your business choices while maintaining a straightforward legal process. However, it’s important to understand that this structure also comes with personal liability risks and limited scalability.

As your business grows, you can easily transition to an incorporated structure to gain liability protection and potential tax advantages.

Contact our incorporation experts to set up your business in British Columbia today.