Are looking to set up a corporation in British Columbia? British Columbia’s business scene is as varied as its landscapes, from the lively tech hub of Vancouver to the quiet shores of Vancouver Island and the resource-rich towns in the interior. No matter what you want to do or what you do for a living, our guide will help you get ahead in British Columbia. In this comprehensive guide, we’ll provide you with all the details you need to know about starting a corporation in British Columbia. Its procedure, types of business entities, incorporation cost, taxation, benefits, etc. Read the complete article.
What is A Corporation?
A corporation is its formal entity, separate from the person who owns the business. Under Canadian law, a corporation has identical rights and legal duties as a person, but not as a single proprietorship.
What are the legal requirements for registering a corporation in BC?
How to Register a Corporation in British Columbia?
The following steps will guide you to registering your corporation in BC. The list of steps are mentioned below:
Select on a Business Idea
The first step in starting a business is to come up with a viable business idea. You may already have a clear vision of the type of business you want to start, or you may need to explore different options. When deciding on a company concept, it’s critical to evaluate your hobbies, expertise, and educational background. Customers are more inclined to trust a company operated by someone with industry expertise.
Put Your Business Idea to the Test
Having a fantastic business concept is one thing, but determining whether or not there is a market for your goods or services is critical. Testing your company concept can assist you in determining its viability. Consider your target audience, rivals, and market size. To properly adapt your marketing efforts, consider demographic criteria such as age, gender, education, income, and values.
Investigate your immediate rivals in the niche market to see how you may distinguish your company. Analyze their techniques, discover areas where you can surpass them, and create a one-of-a-kind value offer.
Examine search engine results for terms relevant to your company to get a sense of market size and demand. You may also conduct interviews with prospective clients in your target market to collect useful input and fine-tune your service before introducing it.
Create a Comprehensive Business Plan
Even if you’re beginning small, creating a well-written business plan is critical. A business plan acts as a road map for your company and may aid in obtaining money from lenders or investors. It also allows you to discover areas that need more attention before establishing your company.
Consider including sections on your company idea, market analysis, marketing and sales strategy, organizational structure, and financial predictions in your business plan.
Select a Name for Your Business
Choosing a company name is a critical step since it establishes the tone for your whole operation. The rules for naming your firm in British Columbia vary depending on the business structure you choose. You are not necessary to submit a company name request if you are a single proprietorship or general partnership operating under your legal name. If you prefer to establish your company name, it must have a unique element, a description, and, if incorporated, a corporate designation (e.g., “Inc” or “Ltd”).
Unless your firm is federally incorporated or you want your business name to be the Business Number (BN) granted to you by the CRA when you register or incorporate, submit a business name request. If your request for a company name is approved, you may register it; nonetheless, only incorporated firms are guaranteed exclusive use of their name.
Decide on Your Business Structure
Choosing the correct business structure is crucial to your company’s growth and operations. In British Columbia, the two most frequent business formations are sole proprietorships and corporations.
A Sole proprietorship is the most basic sort of company to establish. You are not necessary to register your business if you operate under your legal name. If you wish to operate under a name other than your own, the registration procedure is less complicated and less costly than incorporating. You have total control over all business decisions as a single owner and may deduct company losses from your income.
Sole proprietors, on the other hand, are individually accountable for any company debt, and if your firm grows in profitability, you may pay greater tax rates. Accessing funding may also be more challenging as an unincorporated business.
Incorporating your business offers several benefits, including tax advantages, access to capital, and limited liability. Corporations are separate legal entities, protecting owners in case of business failure. However, incorporating is more expensive and requires more paperwork. Business decisions in a corporation involve considering the opinions of shareholders and directors.
Register or Incorporate Your Corporation in BC
After you’ve settled on your business structure, the following step is to register or incorporate your company in British Columbia. The procedure varies somewhat depending on whether you are registering or incorporating your business.
Begin by submitting a company name request in British Columbia. Provide two alternative company names in case your first pick is not available. When your business name is approved, you’ll be given a Name Request (NR) number and 56 days to register your company in British Columbia. You may register at OneStop online, in person, by mail, or via third-party services such as OnDemand International.
To incorporate a company in British Columbia, start by requesting a business name. Following that, submit your Articles of Incorporation. While it is possible to do this yourself, it is recommended to use a service like OnDemand International, which provides all the necessary documents tailored to your business and takes care of paperwork.
For federal incorporation, create an account with Corporations Canada to initiate the process.
Apply for Other Required Permits and Licenses
You may need to apply for extra permissions and business licenses depending on the nature of your firm. OneStop allows you to submit municipal licenses, industry-specific licenses, and other business-related applications online. BizPaL is a valuable resource that provides a customized list of permits and licenses required at different levels of government based on your location and industry.
Secure Financing Options for Your Business
While you may have some personal savings to invest in your business, additional funding may be required at some point. There are several financing options accessible, including government programs, grants, angel investors, and crowdsourcing. Investigate and investigate these possibilities to determine the greatest match for your company.
The Canada Small Business Financing Program, offered by the Government of Canada, assists small companies in obtaining loans from financial institutions by sharing the risk. WorkBC provides employer resources, including grants and incentives for hiring diverse applicants. Additionally, there are resources available specifically for Indigenous entrepreneurs in BC through British Columbia’s Indigenous Small Business Resources.
Create an Online Presence
In today’s digital world, having an internet presence is critical. Having a website is an efficient approach to marketing your company and making it readily accessible online. If starting with a smaller budget, you can begin by creating a presence on free social media platforms. This allows you to engage with potential customers and build brand awareness.
Ensure your website or social media profiles provide relevant information about your products or services, contact details, and a clear call to action. Consider incorporating search engine optimization (SEO) techniques to improve your online visibility and attract organic traffic to your website.
Register for GST/PST
As a business owner in British Columbia, you may be required to register for the Goods and Services Tax (GST) and the Provincial Sales Tax (PST). Unless explicitly excluded, PST applies to retail transactions involving taxable goods or services. If your company’s gross yearly sales reach $30,000, you must pay GST. Familiarize yourself with the tax rules and, if necessary, seek the advice of a tax specialist.
Read More: Company Registration in Vancouver
Business entities to register a business in British Columbia
The different types of business entities for setting up a business in British Columbia are:
- Sole Proprietorship
- General Partnership
- Extraprovincial Corporation
- Branch Office
- Limited Partnership
- Corporation
- Not-for-profit Corporation
What is the cost of registering a business in BC?
The total cost for company incorporation in British Columbia is $380 ($350 + $30 name approval fee). Corporate Online is a web-based incorporation service, but you may also incorporate your business by mailing in physical documents to the British Columbia Corporate Registry.
You must also register your company extra provincially if it is based outside of British Columbia and will do business there. Extraprovincial registration fees are different from one province or territory to the next.
The cost of incorporating with OnDemand International is slightly greater than the cost of incorporating yourself, but you will get all of your documentation completed and filed correctly faster.
Taxation Structure to Start A Company In British Columbia
The taxation structure to start a company in British Columbia is mentioned below. In British Columbia, There are two types of taxes followed:
Provincial Tax
In addition to federal income tax, British Columbia corporations must also pay provincial income tax. British Columbia’s current provincial corporate income tax rate is 12 percent. However, a reduced rate of 8% applies to small businesses with active business income up to $500,000.
Federal Tax
All Canadian corporations, including those in British Columbia, must pay federal income tax. The current federal corporate income tax rate is 15%, but small businesses with active business income up to $500,000 are subject to a lower rate of 9%.
What are the benefits of incorporating a Business in BC?
- Liability limited: The shareholders in an incorporated company are only liable for the debts and liabilities of the company this means they do not have personal responsibility for the liabilities and debts of the business. This could protect your wealth in case your company is sued, or becomes insolvent.
- Tax benefits: There are a variety of tax benefits that come when you incorporate a business in British Columbia. For instance, small companies located in British Columbia benefit from a lower tax rate for corporations than individuals.
- Credibility of business: Registering your company will help establish your company as a credible and legitimate entity. This can help deal with suppliers, investors, and customers.
- Capability for raising capital The process of raising capital is simpler for an established company than for a non-incorporated company. This is due to investors being much more inclined to fund a business that has a limited liability and a long-term existence.
- Perpetual existence A company that is incorporated is a perpetual existence company, meaning that it exists regardless of whether it dies. directors or shareholders. This makes it simpler to transfer the ownership of the company to the next generation.
Examples of starting a Small Business in British Columbia
- Grocery Stores
- Restaurants and Cafe
- Pet Caring Business
- House Cleaning Business
- Salon & Spa Business
Conclusion
Setting up a corporation in British Columbia can be a crucial step on the path to commercial success. It provides protection, credibility, and access to funding that can facilitate the success of your business. You can establish a firm foundation for your business by adhering to the legal requirements and understanding the tax implications.
Are you prepared to begin the company formation process in British Columbia? Feel free to contact our team of experts for advice and assistance. At OnDemand International, We are here to assist you at every stage. Contact Us Today!
FAQ’s
It may just take a few hours to apply for incorporation in British Columbia. It might take longer to prepare the documents, and it might take up to 15 days to get your Certificate of Incorporation.
Yes, under the British Columbia Business Corporations Act, companies must submit every year reports, maintain complete company records, and attend frequent meetings following incorporation.
In British Columbia, there is no minimum equity requirement for incorporation. It is possible to incorporate with just $1 in equity or with no equity at all.
