MileIQ: Mileage Tracker & Log

MileIQ Inc.

GET — On the App Store

View
MileIQPricing
Open MenuClose Menu
Self Employed

What is the Sole Proprietor Process For Canada?

Marc Chaput
March 12, 2019
A young artist and her dog

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

Get Started

If you're self-employed, you're likely a sole proprietor. Here's a walkthrough of the sole proprietor process.

What is a sole proprietorship business?

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.

How to become a sole proprietor

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.

Choosing a business name

The CRA recommends a few things when choosing a business name:

     
  • Make sure it reflects the product or service
    •  
  • Have an idea of the image you'd like to project
    •  
  • Consider a simple, easy-to-remember name
    •  
  • But be original and make sure it isn't taken!

Is my business name available?

The CRA suggests that you:

     
  • Start by conducting an internet search
    •  
  • Consult national name databases:
  •   Nuans for Canadian corporate names (except Quebec) and trademarks  
  • Or a search for business registry in Nova Scotia, Ontario and Quebec.

You can conduct an online business registry search in:

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

Get Started

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:

What are some examples of a sole proprietorship?

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.

Do you need a business license for 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.

Filing income tax as a sole proprietor

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:

     
  • Has to pay tax for the year
    •  
  • Disposed of capital property or had a taxable capital gain
    •  
  • Has to make Canada Pension Plan/Quebec Pension Plan payments on self-employed or pensionable earnings
    •  
  • Wants access to employment insurance for the self-employed
    •  
  • Received a CRA request to file a return
    •  
  • Wants to claim an income tax refund, refundable tax credit, or GST/HST credit
    •  
  • Wants to claim the Canada child tax benefit.

Other circumstances may apply to individual situations. Call 1-800-959-5525 if you need clarification from the CRA.

Still tracking miles by hand?

Use MileIQ to automatically keep a full, IRS friendly mileage log.

Get Started

Related Blog Posts

Is bankruptcy the answer?
Small Business Tips

Should You Declare Bankruptcy?

Bankruptcy is an important financial decision you may have to make one day. Here's what to know about the pros and cons before you declare bankruptcy.

Purchasing needed supplies
Taxes

What Startup Costs Can a Small Business Write Off?

We explain how the CRA views the official start date of a business and call out what qualifies as startup costs in Canada.

Business partners in their shop
Taxes

How Do Business Partnerships Pay Taxes in Canada?

Business partnership taxes don't have to be complex. Here's what to know so you can satisfy the CRA requirements at tax time.

It's almost tax time
Taxes

Important Tax Deadlines 2017 For Self-Employed

These tax deadlines 2017 for self-employed are important to know to stay on top of your tax bill. Mark these down on your calendar.

Expectant mother holding a sonogram
Self Employed

Self-Employed Maternity Leave in Canada

Thinking of starting a family as a self-employed Canadian? Learn more about Canada's Employment Insurance Program to qualify for maternity leave benefits.

Delivery of crucial equipment
Small Business Tips

What is Capital Cost Allowance (CCA)?

This article covers how and when to claim a Capital Cost Allowance or CCA, which is a depreciation deduction that Canadians can claim on a business asset.

MileIQ: Mileage Tracker & Log

MileIQ Inc.

GET — On the App Store

View
MileIQPricing
Open MenuClose Menu

If you're self-employed, you're likely a sole proprietor. Here's a walkthrough of the sole proprietor process.

What is a sole proprietorship business?

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.

How to become a sole proprietor

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.

Choosing a business name

The CRA recommends a few things when choosing a business name:

     
  • Make sure it reflects the product or service
    •  
  • Have an idea of the image you'd like to project
    •  
  • Consider a simple, easy-to-remember name
    •  
  • But be original and make sure it isn't taken!

Is my business name available?

The CRA suggests that you:

     
  • Start by conducting an internet search
    •  
  • Consult national name databases:
  •   Nuans for Canadian corporate names (except Quebec) and trademarks  
  • Or a search for business registry in Nova Scotia, Ontario and Quebec.

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:

What are some examples of a sole proprietorship?

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.

Do you need a business license for 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.

Filing income tax as a sole proprietor

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:

     
  • Has to pay tax for the year
    •  
  • Disposed of capital property or had a taxable capital gain
    •  
  • Has to make Canada Pension Plan/Quebec Pension Plan payments on self-employed or pensionable earnings
    •  
  • Wants access to employment insurance for the self-employed
    •  
  • Received a CRA request to file a return
    •  
  • Wants to claim an income tax refund, refundable tax credit, or GST/HST credit
    •  
  • Wants to claim the Canada child tax benefit.

Other circumstances may apply to individual situations. Call 1-800-959-5525 if you need clarification from the CRA.

Get started for free