Congratulations on starting a small business! Did you know that in 2011, about 90 per cent of Canadian export trade came from small businesses? That was up from the 85 per cent seen in preceding years. Small business continues to have a big impact on the Canadian economy, and there are some key things you need to know to keep your business running.
Entrepreneurship is hard and many startups fail before they get off the ground. This is not always due to lack of capital. A lack of awareness of business practices and regulations can damage your efforts and have a lasting impact.
Avoid common startup mistakes with this handy checklist:
- Define your structure. Are you a sole proprietorship, in a partnership or functioning as corporation? Each structure comes with its own rules for reporting income, paying taxes and submitting forms to Canada Revenue Agency (CRA).
- Get a business number. As your business grows, so does your paperwork, taxation and reporting needs. Having a business number smooths out the process between you and CRA. When you just start out, you may not need a number, but as you grow and become engaged in paying taxes, payroll or exporting, to name a few, that number is required.
- Know when and how to pay taxes. The first dollar you make is so exciting! You’ll make more and more of those dollars as your business grows, and when you start making $30,000 a year, it’s time to collect and remit GST/HST. Now, this isn’t actually all that cut and dried. There are exceptions, such as which side of the border you do business on and what type of business you operate, but the critical thing to know is: at what point do you have to collect and remit taxes? Speak with CRA or an accounting firm to ensure you don’t miss this important window. If you do, you’ll owe taxes.
Once you’ve determined when you have to remit, learn how. CRA has easy banking or online options and they recently announced that each business will have one single access code (as opposed to codes issued monthly) to make online remittance even easier.
- Know how to do an acquisition. One of the ways to quickly grow your business is to acquire the assets, or outright purchase, a similar one. Merging the two businesses can give you greater access to labour, materials, capital and equipment. Before you merge or acquire, you need to know how this affects your GST/HST needs. Review the rules and considerations before you start, and engage a legal and accounting team to ensure you remain in compliance.
AF Accounting Can Help
AF Accounting provides boutique services for small business in Quebec. Recognizing that smaller firms don’t always have the budget or access for a full accounting department, we offer a suite of services so you get what you need, when you need it. We can be your contract bookkeeper or simply advise you on an issue. We can do your business taxes or help you apply for your business number. Contact us today and see how partnering with AF Accounting is a smart choice for you and your business.