If you're self-employed, you're likely a sole proprietor. Here's a walkthrough of the sole proprietor process.
The CRA defines sole proprietorship as the simplest kind of business structure. It is an unincorporated business owned by one person. The owner makes all decisions and handles all the profits and losses. The owner does not have separate legal status from the business.
A sole proprietor operates as an individual or as a registered, unincorporated business. If you do business as an individual, invoices use your own name. If your business has a name, invoices use your business name. You'll need a separate bank account if you have a business name.
The CRA recommends a few things when choosing a business name:
The CRA suggests that you:
You can conduct an online business registry search in:
You must register any business name that isn't just your given name. This applies even if your business name is your name plus something. For example, "Mark's Catering." You must register your business names according to provincial or territorial law:
There are many types of roles that can be a sole proprietorship. Farmers and fishers may operate as sole proprietors. Consultants, shoemakers and more can be a sole proprietorship.
You may need a license depending on what field you're in. Consult the CRA-approved database if you're not sure if your business requires a special permit.
Sole proprietors should fill out a T1 form and benefit return to report revenue and claim business expenses. Calculate net income or loss as part of the owner's income. The CRA requires a T1 return if the sole proprietor:
Other circumstances may apply to individual situations. Call 1-800-959-5525 if you need clarification from the CRA.