Starting a business in Canada is an exciting endeavor, but it requires several important steps, including obtaining a Business Number (BN) from the Canada Revenue Agency (CRA). A Business Number is essential for managing taxes, filing returns, and dealing with the CRA. Whether you’re registering a sole proprietorship, partnership, or a corporation, obtaining a BN is a crucial step in the Canada business setup process.
In this article, we’ll guide you through the steps to obtain your Business Number (BN) from the CRA, explain why it’s necessary for your business, and provide tips on how to keep your business compliant with Canadian regulations.
What is a Business Number (BN)?
A Business Number (BN) is a unique 9-digit identifier that the Canada Revenue Agency (CRA) assigns to businesses for the purpose of managing federal taxes and other related activities. The BN is required for businesses that are registered in Canada and need to deal with the CRA for various reasons, including:
- Taxation: You’ll need a BN to collect and remit taxes like Goods and Services Tax (GST) or Harmonized Sales Tax (HST).
- Payroll: If you have employees, you’ll need a BN to handle payroll deductions and remittances to the CRA.
- Import/Export: For businesses involved in importing and exporting goods, a BN is necessary for customs and border security purposes.
- Corporate Compliance: Corporations must use their BN for filing taxes, annual returns, and other official documentation.
Why Do You Need a Business Number (BN)?
Obtaining a BN from the CRA is an essential step for all businesses in Canada, and here’s why:
- Tax Reporting and Compliance: The BN is used by the CRA to identify your business in the tax system. This is necessary for all types of tax reporting, including GST/HST, payroll deductions, and corporate income taxes.
- Invoicing and Collecting GST/HST: If your business sells taxable goods or services, the BN is required to collect and remit GST/HST on your invoices.
- Employer Payroll: For businesses with employees, a BN is essential for setting up payroll accounts and remitting employee taxes to the CRA.
- Easy Communication with CRA: Using your BN helps streamline communications and ensures that your business is correctly identified by the CRA when you file documents or make inquiries.
- Registering for Additional Program Accounts: If your business is eligible for certain government programs, like Payroll Deductions, Corporate Income Tax, or Import/Export Programs, having a BN is the first step.
How to Obtain a Business Number (BN) from the CRA
The process to obtain a Business Number (BN) from the CRA is relatively straightforward. Here’s a step-by-step guide to help you navigate the process:
1. Determine if You Need a BN
Not all businesses are required to obtain a BN immediately. You will need a BN if:
- You plan to register for GST/HST because your taxable sales exceed $30,000 in a 12-month period.
- You have employees and need to set up a Payroll Program Account.
- You intend to import or export goods.
- You want to establish your business as a corporation or partnership and need to file corporate taxes.
If none of the above apply, and you operate as a sole proprietor without employees or significant sales, you might not need a BN right away. However, it’s recommended to get a BN if you plan to grow your business in the future.
2. Register Your Business with the CRA
If you’ve determined that you need a Business Number, you can proceed to register your business with the Canada Revenue Agency. There are several methods available to register:
-
Starting a business in Canada is an exciting endeavor, but it requires several important steps, including obtaining a Business Number (BN) from the Canada Revenue Agency (CRA). A Business Number is essential for managing taxes, filing returns, and dealing with the CRA. Whether you’re registering a sole proprietorship, partnership, or a corporation, obtaining a BN is a crucial step in the business registration process.
In this article, we’ll guide you through the steps to obtain your Business Number (BN) from the CRA, explain why it’s necessary for your business, and provide tips on how to keep your business compliant with Canadian regulations.
What is a Business Number (BN)?
A Business Number (BN) is a unique 9-digit identifier that the Canada Revenue Agency (CRA) assigns to businesses for the purpose of managing federal taxes and other related activities. The BN is required for businesses that are registered in Canada and need to deal with the CRA for various reasons, including:
- Taxation: You’ll need a BN to collect and remit taxes like Goods and Services Tax (GST) or Harmonized Sales Tax (HST).
- Payroll: If you have employees, you’ll need a BN to handle payroll deductions and remittances to the CRA.
- Import/Export: For businesses involved in importing and exporting goods, a BN is necessary for customs and border security purposes.
- Corporate Compliance: Corporations must use their BN for filing taxes, annual returns, and other official documentation.
Why Do You Need a Business Number (BN)?
Obtaining a BN from the CRA is an essential step for all businesses in Canada, and here’s why:
- Tax Reporting and Compliance: The BN is used by the CRA to identify your business in the tax system. This is necessary for all types of tax reporting, including GST/HST, payroll deductions, and corporate income taxes.
- Invoicing and Collecting GST/HST: If your business sells taxable goods or services, the BN is required to collect and remit GST/HST on your invoices.
- Employer Payroll: For businesses with employees, a BN is essential for setting up payroll accounts and remitting employee taxes to the CRA.
- Easy Communication with CRA: Using your BN helps streamline communications and ensures that your business is correctly identified by the CRA when you file documents or make inquiries.
- Registering for Additional Program Accounts: If your business is eligible for certain government programs, like Payroll Deductions, Corporate Income Tax, or Import/Export Programs, having a BN is the first step.
How to Obtain a Business Number (BN) from the CRA
The process to obtain a Business Number (BN) from the CRA is relatively straightforward. Here’s a step-by-step guide to help you navigate the process:
1. Determine if You Need a BN
Not all businesses are required to obtain a BN immediately. You will need a BN if:
- You plan to register for GST/HST because your taxable sales exceed $30,000 in a 12-month period.
- You have employees and need to set up a Payroll Program Account.
- You intend to import or export goods.
- You want to establish your business as a corporation or partnership and need to file corporate taxes.
If none of the above apply, and you operate as a sole proprietor without employees or significant sales, you might not need a BN right away. However, it’s recommended to get a BN if you plan to grow your business in the future.
2. Register Your Business with the CRA
If you’ve determined that you need a Business Number, you can proceed to register your business with the Canada Revenue Agency. There are several methods available to register:
-
Online Registration: This is the most convenient option. You can register your business online through the CRA’s Business Registration Online (BRO) service. To do this, you need to have a CRA user ID and password. If you don’t have one, you will need to create an account before proceeding.
-
By Phone: If you prefer, you can register by phone by calling the CRA Business Enquiries line at 1-800-959-5525. You will need to provide information about your business structure, such as the name of the business, the type of business, and the nature of its activities.
-
By Mail: You can also complete the Form RC1 (Request for a Business Number) and mail it to the CRA. This method takes longer, as you will need to wait for the CRA to process your request and send you your BN.
3. Provide Required Business Information
To obtain a BN, you will need to provide specific details about your business, including:
- Legal Name of the Business: This is the official name of your business as registered with the CRA.
- Business Structure: Whether you are setting up a sole proprietorship, partnership, or corporation, the CRA needs to know your business structure to assign the appropriate tax identification.
- Business Activities: The CRA requires information about the activities of your business. For example, if your business involves retail, manufacturing, or providing services, you will need to describe what you do.
- Business Address: You’ll need to provide a physical address for your business.
- Contact Information: A phone number and email address where the CRA can reach you.
4. Wait for Your Business Number (BN) to Be Issued
Once your business registration is processed, the CRA will issue you a Business Number (BN). Depending on the method you use, the timeframe for receiving your BN will vary:
- Online Registration: You will usually receive your BN immediately after submitting your registration.
- By Phone: If you register by phone, the CRA will provide your BN during the call.
- By Mail: If you register by mail, it can take up to two to three weeks to receive your BN.
Your Business Number (BN) will be 9 digits long, and it will be used to identify your business for all CRA-related activities. You will also receive information on how to register for various tax accounts, such as GST/HST, Payroll, or Corporate Income Tax, if applicable.
5. Register for Additional Program Accounts (If Needed)
Once you have your BN, you may need to register for other program accounts, depending on your business activities. These accounts include:
- GST/HST Account: If your business makes taxable sales above $30,000, you’ll need to register for a GST/HST account.
- Payroll Account: If you have employees, you need to set up a Payroll Account with the CRA to remit payroll taxes.
- Corporate Income Tax Account: Corporations must also register for Corporate Income Tax accounts to file taxes.
You can register for these additional accounts online through the CRA Business Registration Online (BRO) service.
6. Keep Your Business Number Up to Date
Once you have your BN, make sure to keep it updated with the CRA. If you change your business structure or address, you must inform the CRA to ensure they have accurate information for tax filings. If your business becomes inactive or is closed, notify the CRA to close your BN and avoid unnecessary filings.
Conclusion
Obtaining a Business Number (BN) from the Canada Revenue Agency (CRA) is a vital step in setting up a business in Canada. It’s needed for tax compliance, managing payroll, and handling other business activities. The process is straightforward, whether you choose to register online, by phone, or by mail.
By following the steps outlined above, you can easily obtain your BN and ensure your business operates in compliance with Canadian regulations. If you’re unsure about any part of the process or have specific questions related to your business structure, it’s always a good idea to consult with a professional accountant or business advisor to guide you through the registration and tax setup.
FAQs
1. Can I obtain a Business Number (BN) without registering my business?
No, you must first register your business with the CRA before you can obtain a BN. The BN is part of the business registration process.2. Do I need a Business Number if I’m a sole proprietor?
Yes, if you plan to collect GST/HST, hire employees, or participate in certain government programs, you will need a BN, even as a sole proprietor.3. How long does it take to get a Business Number (BN) from the CRA?
The processing time for obtaining a BN can vary. Online registrations can be completed immediately, while phone registrations may be processed during the call. If you apply by mail, it can take up to two to three weeks.This is the most convenient option. You can register your business online through the CRA’s Business Registration Online (BRO) service. To do this, you need to have a CRA user ID and password. If you don’t have one, you will need to create an account before proceeding.
-
By Phone: If you prefer, you can register by phone by calling the CRA Business Enquiries line at 1-800-959-5525. You will need to provide information about your business structure, such as the name of the business, the type of business, and the nature of its activities.
-
By Mail: You can also complete the Form RC1 (Request for a Business Number) and mail it to the CRA. This method takes longer, as you will need to wait for the CRA to process your request and send you your BN.
3. Provide Required Business Information
To obtain a BN, you will need to provide specific details about your business, including:
- Legal Name of the Business: This is the official name of your business as registered with the CRA.
- Business Structure: Whether you are setting up a sole proprietorship, partnership, or corporation, the CRA needs to know your business structure to assign the appropriate tax identification.
- Business Activities: The CRA requires information about the activities of your business. For example, if your business involves retail, manufacturing, or providing services, you will need to describe what you do.
- Business Address: You’ll need to provide a physical address for your business.
- Contact Information: A phone number and email address where the CRA can reach you.
4. Wait for Your Business Number (BN) to Be Issued
Once your business registration is processed, the CRA will issue you a Business Number (BN). Depending on the method you use, the timeframe for receiving your BN will vary:
- Online Registration: You will usually receive your BN immediately after submitting your registration.
- By Phone: If you register by phone, the CRA will provide your BN during the call.
- By Mail: If you register by mail, it can take up to two to three weeks to receive your BN.
Your Business Number (BN) will be 9 digits long, and it will be used to identify your business for all CRA-related activities. You will also receive information on how to register for various tax accounts, such as GST/HST, Payroll, or Corporate Income Tax, if applicable.
5. Register for Additional Program Accounts (If Needed)
Once you have your BN, you may need to register for other program accounts, depending on your business activities. These accounts include:
- GST/HST Account: If your business makes taxable sales above $30,000, you’ll need to register for a GST/HST account.
- Payroll Account: If you have employees, you need to set up a Payroll Account with the CRA to remit payroll taxes.
- Corporate Income Tax Account: Corporations must also register for Corporate Income Tax accounts to file taxes.
You can register for these additional accounts online through the CRA Business Registration Online (BRO) service.
6. Keep Your Business Number Up to Date
Once you have your BN, make sure to keep it updated with the CRA. If you change your business structure or address, you must inform the CRA to ensure they have accurate information for tax filings. If your business becomes inactive or is closed, notify the CRA to close your BN and avoid unnecessary filings.
Conclusion
Obtaining a Business Number (BN) from the Canada Revenue Agency (CRA) is a vital step in setting up a business in Canada. It’s needed for tax compliance, managing payroll, and handling other business activities. The process is straightforward, whether you choose to register online, by phone, or by mail.
By following the steps outlined above, you can easily obtain your BN and ensure your business operates in compliance with Canadian regulations. If you’re unsure about any part of the process or have specific questions related to your business structure, it’s always a good idea to consult with a professional accountant or business advisor to guide you through the registration and tax setup.
FAQs
1. Can I obtain a Business Number (BN) without registering my business?
No, you must first register your business with the CRA before you can obtain a BN. The BN is part of the business registration process.
2. Do I need a Business Number if I’m a sole proprietor?
Yes, if you plan to collect GST/HST, hire employees, or participate in certain government programs, you will need a BN, even as a sole proprietor.
3. How long does it take to get a Business Number (BN) from the CRA?
The processing time for obtaining a BN can vary. Online registrations can be completed immediately, while phone registrations may be processed during the call. If you apply by mail, it can take up to two to three weeks.
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