Newfoundland and Labrador is a great province for business because of its strong economy, low taxes, and skilled workforce. The province has a diverse mix of industries that provide stable employment and generate wealth.
Newfoundland's natural resources are an important part of its economy. The province is a major producer of fish, forestry products, and minerals.
The tourism industry is also booming in Newfoundland. Visitors are coming to experience its stunning scenery, friendly people, and rich culture.
Newfoundland is an ideal place to start or grow a business. Plus, there are plenty of opportunities for entrepreneurs who are willing to seize them.
The tax burden in Newfoundland is relatively low, which makes it an attractive place to do business. The corporate tax rate is 15%, so businesses can keep more of their profits.
Registering a business in Newfoundland is easy and you can do it online. You will need to download business registration forms from the Digital Government and Service NL website and pay a filing fee. The process is fast and easy, and you will have to spend only a couple of days to register a business in Newfoundland.
Legal business forms to choose from in Newfoundland
Before you register your business, you need to decide which legal structure would be best for you, as well as if you want to register federally or provincially. The most common legal business forms are sole proprietorships, partnerships, and corporations.
This is the simplest type of business to set up. It is simple because one person owns the business.
This structure offers the least amount of protection for the owner's personal assets. Sole proprietorship businesses are not separate from their owners, so the owner is personally liable for all debts and liabilities of the business. Newfoundland does not require you to register a sole proprietorships, so you can start your business right away.
This is a legal business form owned and operated by two or more individuals. You can register a partnerships as general partnerships or limited partnerships.
General partnerships offer the same level of protection for the partners' personal assets as a sole proprietorship. Limited partnerships offer some protection for the partners' personal assets.
Limited partners are only liable for the debts of the business up to the amount they have invested. Provincial law allows you to set up a business as a general partnership without any registration.
All big businesses are corporations. A corporation is a legal entity that is separate from its owners, who are called shareholders.
This separation offers the shareholders limited liability, which means they are only liable for the debts of the business up to the amount they have invested. It can be easier for corporations to attract potential investors as well as to manage complex business processes compared to other legal business forms. The disadvantage of a corporation is that it is more complex to set up and run than other business structures.
How to register a business name in Newfoundland?
If you are using your own name or the name of your partnership as your business name, you do not need to register it. If you want to use a different name for your business, you will need to register it with the Registry of Companies.
The first step in a business name registration process is to verify that the name you want to use is available. You can do this by searching the Companies and Deeds Online (CADO) database to check if the name is available. Once you have verified that the name is available, you can fill out the business name reservation form.
Provide your first and last name and phone number, and make sure your business name aligns with the Name Reservation Guidelines. If you are registering a business name for your corporation, your business name should consist of descriptive, distinctive, and legal elements.
The descriptive element should describe the business, while the distinctive element should make it stand out from other businesses. The legal element should be the corporate designator, such as “Inc.” or “Corp.”.
The name reservation fee is $10, and you will need to pay it with a credit card when you submit the form. You will receive a confirmation email once the registry processes your payment.
The registry will reserve your business name for 90 days. Make sure you submit your incorporation documents within that time frame.
How to register a sole proprietorship or partnership in Newfoundland?
Newfoundland and Labrador is a unique province as you don't need to register your sole proprietorship or partnership with the province. However, the registry requires you to register your business name if it isn't your personal name.
Also, the registry does not require you to obtain HST if your business is based in Newfoundland and Labrador and your total revenue is less than $30,000. You may still need to obtain certain licenses and permits in order to operate your business. You can find more information on licenses and permits on the BizPal Newfoundland website.
The decision to avoid additional bureaucracy associated with sole proprietorship and partnership registration can be explained by the province's low business costs and taxes, as well as its supportive environment for entrepreneurs. All of these factors make Newfoundland and Labrador an extremely attractive place for small business owners.
How to register a corporation in Newfoundland?
The incorporation process in Newfoundland and Labrador is relatively simple. You can register your corporation by filling out the business registration forms and submitting them to the Registry of Companies by email or online through Companies and Deeds Online – CADO.
The incorporation process consists of 11 steps, where you will need to provide information about your shareholders, directors, and officers. As well as the business name, address, and contact information. You will also need to pay the incorporation fee of $270.
Start filling out the incorporation application by providing your first and last name, phone number, and email. You can do it by yourself or choose a law firm. More information on law firms is available in the drop-down menu when you click the “Law Firm” field.
The next step requires you to choose your corporation name. You should have your business name reservation number when you register your corporation.
If not, you can reserve a name by following the steps above. You can also register a numbered corporation, which means that the registry will give your corporation a number as its name.
This is often done when the business owner wants to register the corporation but isn't sure about the name. You don't need to reserve a numbered corporation name. A non-numbered corporate name is a better option as it is more memorable.
Step 3 requires you to fill out the registered office address information and mailing address. The registered office address is the physical location of your business, while the mailing address can be a P.O. Box or other address where you would like to receive mail. Your office must be located in Newfoundland and Labrador, but your mailing address can be located anywhere in the world.
Enter the share structure of your corporation in Step 4. You will need to provide information on the type of shares, the number of shares, restrictions on shares, and whether the shares are voting or non-voting.
There are several most common share classes, including Class A and Class B shares. Class A shares allow the shareholder to vote and receive dividends, while Class B shares do not allow the shareholder to vote but do receive dividends.
Next, you should enter the restrictions on share transfer. These restrictions are important as they protect the shareholders from having their shares taken away without their consent.
The most common restriction is a right of first refusal, which gives the other shareholders the right to purchase shares before anyone else buys the shares.
Continue filling out your incorporation application by providing information about directors. You will need to provide the names, addresses, and dates of birth of all directors.
You should also indicate whether the directors are residents of Newfoundland and Labrador. Before April 1, 2022, Canada Business Corporation Act required that a minimum of 25% of the directors be residents of Canada. Currently, there is no such requirement.
Proceed to the next step by filling out restrictions on your business activities. For instance, you may want to restrict your business to certain products or services.
Alternatively, you may want to limit your business to operate in Newfoundland and Labrador only. You can also skip this step if you don’t want to set any restrictions.
Fill out other provisions that may be important to your corporation, such as powers of attorney, in Step 8. This step is also optional, and you can skip it if you don't have any other provisions to add.
There are a few other provisions that you should incorporate into the bylaws. One is a section on resignations. Bylaws should state how and when board members can resign.
Another provision that you should include is a section on indemnification. This section protects board members from being held liable for any actions they take as part of their board duties.
In Step 9, you will need to enter all the incorporators' information. The incorporators are the people who sign the incorporation documents and are responsible for filing them with the Registry of Companies. You will need to provide the names and addresses of all incorporators.
You can also add some special instructions for the company Registrar in Step 10. For example, you may want the Registrar to issue share certificates. Skip this step if you don't have any special instructions.
Finally, review all the information you have provided and submit the application to the Registry of Companies. You will need to pay the incorporation fee of $270 with your Visa, Mastercard, or Amex credit card when you submit your application.
Once your corporation is registered, you will receive a certificate of incorporation. You should keep this certificate in a safe place as it is required for various purposes, such as opening a business bank account or registering for GST/HST.
Do you need a business bank account in Newfoundland?
Yes, you need to open a business bank account in Newfoundland once your corporation is registered. A business bank account is a separate account from your personal bank account and is used to track the financial transactions of your business.
This account will have its own unique number and will be used to deposit revenue and pay expenses. Furthermore, a business bank account allows you to take advantage of certain business products and services, such as loans and business credit cards. You will enjoy certain protections and perks when you have a business credit card, such as insurance against losses due to fraud.
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Frequently asked questions about registering a business in Newfoundland
You can reserve a business name by filling out the business name reservation form online. The name reservation fee is $10, and once the form is submitted, the name will be reserved for 120 days. If you decide to register your business during that time, you can do so by registering your business with the Registry of Companies.
You don't need to register a small business in Newfoundland. Sole proprietorships and partnerships don't have to be registered with the province, but you may want to register your business name.
Sole proprietorships and partnerships don't require any registration in Newfoundland, so they are free to set up. However, if you want to form a corporation, the province will charge a $270 fee.
There are pros and cons to both federal and Newfoundland business incorporations. If you're doing business in multiple provinces, you may want to consider federal incorporation. This will give you the ability to operate your business under one name and number across Canada. However, if you're only doing business in Newfoundland, provincial incorporation may be a better option. This can be less expensive and may provide some tax advantages.