Setting up a Business
If you are reading this, you have likely spent hours researching to determine the next steps to launching your product or services business.
There is only one essential step you need to do – contact your accountant at JMH&CO. We will assist you through this process and guide you based on your specific situation.
There are a few things to consider for most startup businesses before you will be ready to start.
Do you incorporate your business or stay as a Sole Proprietorship?
This choice depends on your situation. We would look at the following factors to help you make that decision:
How much are the startup costs?
Will you take on lots of debt in the near future?
Do you have any other personal taxable income?
How much will your business make in the first year?
Will it be costly to incorporate when the business earns more money? This depends on the amount and type of assets that will be in the business.
What are the liability risks, such as the risk of an employee or client lawsuit against the business?
All these factors come into play when determining which option is best for you to keep your taxes and business expenses to a minimum.
Do you need to complete a GST registration with Canada Revenue Agency (CRA)?
Generally speaking, you will likely need to register for GST unless you fall under the products or services exempt from GST or fall below the 12-month income rule.
However, depending on your business and the types of expenses you have, you may choose to voluntarily register as there could be an advantage to registering for GST upfront. We would analyze this area to help you make the right decision for your startup business.
Do you need to open a different bank account?
You will want to open up a separate bank account for your business transactions to keep your personal life separate from your business. This separation is key to keeping track of your revenue and expenses, which can be very helpful if you ever have the bad luck of an audit.
Where do you need a Business License?
You will need a business license with the City of Medicine Hat, or Cypress Country, or any areas that you plan to provide your services or sell your products.
As you can see, setting up a business isn’t overwhelming as long as you seek advice from an accountant, such as our very own Ryan Dorton or Dylan Anderson, before you start. By making sure your structure is the best for your specific business, finance, and tax situation, we can help ensure that you have more money left over to grow for years to come.