START A SMALL BUSINESS

START A SMALL BUSINESS

STARTING YOUR OWN SMALL BUSINESS

I love entrepreneurs and get excited about new business ideas.   I grew up in a family operated business and started my own when I was 26 years old and from a small town like Apsley you sometimes have to create your own job to be able to stay and work here.

Here are a few tips to start you off and answer some usual questions I get when providing a consultation for new entrepreneurs:

DO I HAVE TO REGISTER MY BUSINESS?

You do not have to register if you are operating under your own name and people make out their cheques to you personally.  You do need to register a business name with the Ontario government if you are operating under a name other than your own name and to open a bank account with that name you will need a Master Business License which costs $60 and is renewable every 5 years.

DO I HAVE TO REGISTER FOR HST?

You do not have to register for HST unless you have had sales in any 4 consecutive quarters of more than $30,000.  This is not determined on profit but Gross Sales ,so someone with labour only may not need to register right away and can register when they reach the $30,000 in sales in any 4 quarter period (you have 30 days to register from the end of that period ).  On the other hand if you are purchasing supplies and materials and then rebilling the customer you may reach the $30,000 mark very early and would want to register right away.

Also be aware that some types of businesses are exempt from HST and are not required to register due to the nature of the business for example Daycare Services.

SHOULD I REGISTER FOR HST EVEN IF NOT REQUIRED TO?

There are situations where you may want to register for HST even if you have not had $30,000 in sales yet.  When you register for HST you will collect 13% HST from your customer and you are then allowed to also deduct from this any HST you paid on expenses incurred to operate your business, then remit the difference to the CRA.  So if you are purchasing large capital items or a lot of goods for resale you may want to register to take advantage of this.  Another advantage to registering is it will make your business appear more professional and maybe a bigger operation than you are when starting out (if this is an advantage to you) On the other hand not having to collect HST will give you an advantage over some other competition when it comes to what they have to pay if your customer is the end user and not another business.

Some types of Businesses provide “0” rated activities as determined by CRA (eg;  farming, some medical devices, groceries, prescription drugs, transportation outside Canada) so even though you do not have to collect the HST you would want to register to claim back any HST you paid on goods and services in the course of operating your business.

One disadvantage of registering for HST is the added obligation to file a return either yearly or quarterly and remit the payment required on time.  Since you are collecting money that is not yours it is Very Important that you set this money aside and have it available to send in when required or you will incur not only interest and penalties but you can have your bank accounts ceased.  You cannot escape this debt even by claiming bankruptcy.

 

Stay tuned next month for more tips from Accurate Accounting & Tax Service on Business and Tax stuff!

 

Susan Northey

Susan@accuratetax.ca

Accurate Accounting & Tax Services

5584 Hwy 28, Unit 4, Woodview, ON

705 656 1200

By |2017-08-09T18:03:29+00:00August 9th, 2017|Categories: Accounting, Bookkeeping, Business Coaching, Tax Tips|Comments Off on START A SMALL BUSINESS

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This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.