Chores For After Incorporation

What's there to do after you get your shiny, new corporation back from the lawyers? In Canada, plenty. And I'm not talking about the obvious, pleasurable activities of running your business and making money. No, my friend, I'm talking about red tape -- government regulation. It's not going away, so you may as well get used to it and deal with it up front. That way, you'll avoid a lot of grief.

Here's a brief overview aimed at the general business. Some of you may be involved in particular industries where you'll have to obtain specific registration under one or more pieces of legislation. The specifics vary by province and by industry. Common examples include car dealers, people in the financial business (stock brokers, mortgage brokers, mutual fund or insurance sellers), and professionals (such as doctors, dentists, accountants and lawyers), liquor licensing, and so on.

Here's a list of post-incorporation chores that most of you will need to attend to:

Open your bank account: A pretty obvious chore. Your banker will require the certificate of incorporation, notice of articles, and the full set of articles for your company. These documents are found (or should be found) in your corporate records book (usually a three-ring binder with tabs to separate the different kinds of corporate documents you'll collect over time). The bank will take copies for their files. The bank will also present you with at least an account operation agreement and a signing authority directors' resolution. You'll need to sign those. Make sure you keep copies for your records.

The account operation agreement is straightforward: it's the deal between your company and the bank for running the corporate account. The resolution is the document that sets the authorizations for the people who will be able to make deposits to the account and sign cheques to withdraw money from the account. In naming those people, you have a choice: you can name the people by individual name (eg, Sally Smith) or by office in the company (eg, any two of the president, the vice president, and the treasurer; or any two directors). We recommend that you identify the signing officers by title and not by individual name. In theory, this way makes it slightly easier to deal with changes to the signing officers. In practice, you may find that a disgruntled signing officer may have the ability to shut down operation of the company bank account if that person complains to the bank. The lesson? Choose your signing officers carefully.

Register for workers' compensation: In British Columbia, registering for workers' compensation is mandatory for almost all occupations and industries. Look in the business listings of your local telephone book under "Workers' Compensation" for the phone number. In the Vancouver area, the local number for WCB employer services is 604 244-6181. You need to register even if you're a one person operation. You can also register online through their website at http://www.worksafebc.com/ or use the "One Stop" service mentioned below.

Get a municipal business licence: Most cities and towns in British Columbia require businesses that have an office in that place to obtain a local business licence. It's nothing more than a tax grab, we agree. But people who care about fully complying with the red tape will want to obtain one. The trick in dealing with your local city hall is to find the correct department. With business licences, it's usually called something like "licenses and permits". You can call or go online or drop by in person to city hall to get your business licence. Or, if you use the "One Stop" service discussed below, you can apply for your business licence along with various tax numbers.

Get tax registrations: In Canada, this means applying for the federal "business number", and the various federal program subaccounts (corporate income tax, payroll registration, import/export, and GST being the main ones) and, as applicable, provincial sales tax or other provincial tax (eg, hotel room tax). The business number is a 9 digit number (eg, 983592352) that identifies your business for federal programs. Then, for each "program" (ie, tax account), you open a 6 digit subaccount: for GST, it's RT0001, for your first subaccount, and RT0002 for a second one; for payroll, it's RP0001; and so on.

You can sign up for these tax accounts the hard way, by applying individually to each government department. But why would you? Over the last few years, both the federal and provincial governments have made signing up for these tax account numbers much easier, by offering a couple of online registration facilities.

The two that we're aware of are: the One Stop website (www.onestopbc.ca or www.bcbusinessregistry.ca); and the federal government's own website found through the Canada Revenue Agency website: http://www.cra-arc.gc.ca/tax/business/menu-e.html (and find the link that says "Business account registration"). We mention this broader link because of the useful information it contains about various tax matters that business owners need to be aware of.

We've used the One Stop website. It can be confusing. And the process can take a long time to get through: up to an hour, we've heard. But if you persevere, it should allow you to register for the main federal tax accounts, the BC provincial sales tax, WCB, and your BC municipal business licence all in one go.

We haven't had to use the federal website. It seems simpler, but it only covers the federal tax account registration and the some provincial sales tax registrations (BC is one of the jurisdictions using the site).

Both websites contain a welcome variety of links that discuss why you need to obtain a business number and what you need to know about using your business number and its various subaccount numbers and other information that relates generally to running a business in Canada.

And for people incorporating a BC company, be aware that from November 29, 2004, the BC Corporate Registry will automatically request and obtain a business number when your corporation is filed. This link from the BC Corporate Registry gives the details: http://www.fin.gov.bc.ca/registries/corppg/cobn.htm

Essentially, this new procedure means that BC is adopting the federal 9 digit business number as the identifier for each corporation. And when the corporation signs up for a BC tax account (such as PST), that account will now be a 6 digit subaccount under the business number (eg, 989343232 BC0001 indicates a BC company; 989343232 BT0001 will indicate the first PST account.)

The business owner will still need to register for WCB and the other federal tax accounts, using one of the methods outlined in this article.

Red tape. Not something as business owners we can love or leave. But at least the Internet makes some of it easier to manage.