Setting up a Canadian Partnership Business


As an independent contractor you have the option of being a Sole Proprietor or an owner of a Partnership. A friend of mine recently became a contractor, and he had the option of registering as a business and billing as a business. 

My friend and I decided to do some investigation to understand how this worked and what some of the processes involved are. 

Sole Proprietorship


Partnership


Business Name 


a.      Form: https://www.ibsa.serviceontario.ca/ibsa/servlet/com.visionmax.servlet.CommandServlet?command=screenflownoscript&screenid=26&_ga=1.255863563.1682117583.1456458425
b.      For a partnership he needs to choose the type as partnership and as a general partnership in the form above.



a.      http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bfr-eng.html . This link has information on the different type of accounts a business owner may require.
b.       The general guideline for GST/HST account is that you need one if your business will be generating more than $30k a year. In my friend’s case it will be as such he needs to register for GST/HST. GST Account registration is part of your business registration. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html
c.      Guidelines for how to charge your customers GST/HST : http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/stps/cllct-eng.html

Day to Day Business

  1. Now that his business is setup, my friend needs to create monthly invoices including a GST/HST portion and bill his client.
  2. He needs to keep track of the GST/HST payment and remit that to the government of Canada.
  3. He needs to track all his business expenses and book them against the revenue he receives from his client.
  4. He needs to do yearly taxes for himself and his partner. This can be done in combination of personal taxes.