As a new entrepreneur, starting a business can be exciting and daunting at the same time. When starting a business, every entrepreneur needs to have a to-do list to help them not to miss important steps such as compliance. In Ontario, business owners must be aware of a business number (BN).
Starting a business in Ontario requires business owners to obtain a business number which is vital for any business. It is used by the federal government to track various business operations such as tax obligation, registration, licensing, and many others. This article will explore what Ontario business numbers are, how business owners can obtain them, and how they can utilise them in business operations.
This is a unique nine-digit identifier associated with your business to help streamline your business interaction with the federal government of Canada. The Canada Revenue Agency (CRA) issues this number to identify a business in Ontario for many reasons..
The business number facilitates effective and coordinated communication with the federal government and government programs, regardless of whether your enterprise is a sole proprietorship, general partnership, or incorporated entity.
With a business number, entrepreneurs can access federal government services such as payroll, corporate tax, and GST/HST tax obligations.
A business number and an Ontario Business Identification Number (BIN) are different. BN is a federal requirement for tax purposes, while a BIN is a provincial requirement for legal operations and provincial transactions.
BIN is a nine-digit number issued by the Province of Ontario for small businesses and Master Business Licenses. The Ontario Ministry of Consumer and Business Services uses the BIN to recognise provincial business accounts. You'll usually need your BIN when communicating with the provincial government about your business.
An Ontario business number is used by any business, whether a corporation, sole trader or a partnership. Businesses need an Ontario business number for:
Tax purposes: with a business number, it is easier to file a tax return since the CRA has your business details.
Business registration: A business number helps in identifying your business with the federal government. It gives your business a unique identity, similar to how a person has a name and Social Insurance Number.
Interact with the government: You can use your BN to interact with the Canada Revenue Agency (CRA) and other government programs. This includes registering for CRA program accounts, managing changes to your business, and making updates online.
Professional credibility: A business number reinforces your business's professional image and compliance. It makes your business credible to government authorities, partners, and customers.
Streamlining processes: A BN simplifies complex tasks like tax filings and payroll deductions. It also streamlines all of your CRA accounts under one business number.
Sole traders will need a business number if their revenue exceeds $30,000 per calendar year. Any business that exceeds this threshold is required to charge tax and pay the government.
To obtain an Ontario business number, one has to determine their business’s eligibility. You can check if your business qualifies for a CRA business number:
· You are registering for the Goods and Services Tax (GST) or Harmonised Sales Tax (HST) and your revenue exceeds the small supplier threshold (currently $30,000 in the last four consecutive quarters).
· You are required to collect employee payroll deductions.
· Corporations need a Business Number for corporate tax filings.
· You will need a business number for applying to government grants or programs.
You can register for a business number in Ontario online through the Ontario Business Central (OBC) portal for immediate processing, or by calling the CRA at 1-800-959-5525 to receive step-by-step guidance.
To register for an Ontario business number, you will need the following business details:
· Social Insurance Number (SIN)
· Business name and registration details
· Personal information like address and date of birth
· Description of your business activity and structure
· Type of business (e.g. sole proprietor, partnership, corporation, trust)
· Name and SIN of owners
· Phone number
· Physical address
· Mailing address (if different from physical address)
Once you have registered for an Ontario number, you can find it by logging into your CRA My Business Account. You can create or log into a CRA account using either a user ID and personal access code or by using one of their many sign-in partners, which include banks and credit unions.
After obtaining your Ontario business number, you can register for taxes depending on your business activities, you may need to register for various tax accounts, such as HST, payroll, or corporate income tax. You will also need to choose other numbers if needed. Depending on your business activities, you may need additional identifiers, like an import/export number. These are classified as CRA program accounts based on your business operations:
GST/HST program: Register if your business is involved in collecting and remitting taxes from customers.
Payroll account: Enroll if your business employs individuals requiring payroll administration.
Import/export: Acquire this account to meet the requirements of import/export trade. Corporate
Tax: Register for this account if your business operates as a corporation. These accounts are essential for ensuring compliance with federal regulations and for the effective management of your business's tax, payroll, and trade responsibilities.
In conclusion, an Ontario business number is important if you have to interact with the federal government in Canada. This streamlines your business interaction process with the federal government when paying taxes and payroll management.
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