TABLE OF CONTENTS
* Regulations and Licenses - General
Regulations and Licences - Employees
* Business Basics
* Canada/Prince Edward Island Business Service Centre
REGULATIONS AND LICENSES - GENERAL
Building and Development Permits
Permits may be required for building or development for business purposes. If you want to construct or renovate a building, add an extension, renovate or put a mobile home on a lot, then you will need a Building Permit. A site suitability assessment (used to determine if a parcel of land will support an on-site sewage disposal system), an entrance way permit, and a request for a culvert are also some of the permits that may be needed before construction begins.
Depending on the area in which you wish to build, building permits are issued by either municipalities or the province. If you wish to build within a municipality, then contact the municipality office to obtain a building permit. A complete list of municipalities can be found at: http://www.gov.pe.ca/municipalities/
If you wish to build in an area outside of a municipality, then you may contact a Property Development Officer of the Planning and Inspection Services Division of the Department of Community and Cultural Affairs at 31 Gordon Drive, Charlottetown or at (902) 368-5280, or at any Access PEI site.
Your application must be accompanied by a site plan and building plan of the proposed project. Contact a Property Development Officer in your area to determine the related fees that must accompany the application.
Business Number (BN): (Includes GST, Payroll Deductions, Importer/Exporter Permit, Corporate Income Tax)
The Business Number (BN) is a reference number system that replaces the many numbers businesses need to deal with government. The BN is designed to help businesses reduce costs and increase competitiveness; it also increases government efficiency and helps to deliver one-stop service at Business Windows.
For further information, please call 1-800-959-5525, see the document Business Number - BN or visit the website at http://www.cra-arc.gc.ca/tax/business/topics/bn/menu-e.html
a) Goods and Services Tax - GST
The GST is a multi-stage tax that applies to most transactions throughout the production and marketing process. Most persons and organizations engaged in commercial activities in Canada who have worldwide taxable sales of more than $30 000 in any four consecutive calendar quarters or in any one calendar quarter, must register for and collect GST, by registering for a BN.
For most businesses, if your revenue from the sales of taxable goods and services over four consecutive quarters is not expected to exceed $30,000, you are not required to register, however it may still be in your best interest to register. If you do not register, you do not charge GST to your customers, but neither will you be able to receive a refund for the GST paid on your business expenses.
For further information, please call 1-800-959-5525, see the document ARCHIVE - Goods and Services Tax (GST) and Harmonized Sales Tax (HST) or visit the Web site at www.cra-arc.gc.ca/tax/business/topics/gst/menu-e.html.
b) Payroll Deductions
You will need a business number to remit Income Tax Deductions, Canada Pension Plan contributions and Employment Insurance premiums, for any employees.
c) Importer / Exporter Permit (Customs)
All Canadian individuals or businesses importing or exporting on a commercial basis must get a BN in order to account for their goods.
d) Corporate Income Tax
Under the Income Tax Act, all corporations have to file a T2 orT2 Short return, even if there is no tax payable. All Canadian businesses that register a corporate income tax account must obtain a BN.
Business Name Registration / Incorporation
A business may be started as a sole proprietorship, partnership, corporation, or cooperative, each with its own separate legal and tax characteristics. Before making a decision on the type of registration for your business, it is well advised to consult an accountant and / or a lawyer.
Often a person starting a business for the first time will operate as a Sole Proprietorship because there are fewer costs involved. Once the business proves to be successful, the sole proprietor can then incorporate a company and have the business carried on by a corporation. In a Sole Proprietorship, the proprietor assumes all the risks, accepts all profits or losses, pays all taxes, and is said to be self-employed. Liability arising out of business activity is borne entirely by the proprietor. All assets, whether business or personal, can be legally taken and used to discharge the liability.
A business name should be registered before it is used, and stationery, signs, advertising, etc. should not be purchased until after the business name has been registered. (A Sole Proprietorship can be operated under the individual\'s name without the need for registration.) A person wishing to register a Sole Proprietorship is required to:
* have a name search conducted on the proposed name to ensure its availability at a fee of $40,
* file a statutory declaration to register the business name at a cost of $65.
To register the business name, conduct a name search, or for more information, please contact Consumer, Corporate and Insurance Services Division of the Office of the Attorney General at 368-4550, or visit their office at 95 Rochford Street, 4th Floor Shaw Building, in Charlottetown.
A partnership is a voluntary contract between two or more persons to place their money, efforts, labour and skill in business with the understanding that there shall be a proportional sharing of profits and losses between them. There should be a written partnership agreement between the partners, drawn up preferably by a lawyer, and signed by the partners before any business is conducted.
If there is not a partnership agreement, then the partners will be subject to various rules set out in the Partnership Act. For example, all partners would be entitled to share equally in the capital and profits of the business and must contribute equally towards the losses sustained by the firm. (These points can be found in more detail in the Partnership Act .)
Within three months of the formation of a partnership, the partners are required to:
* have a name search conducted on the proposed name to ensure its availability at a fee of $40,
* register a statutory declaration of the partnership at a fee of $65.
To register a partnership, conduct a name search, or for more information, please contact Consumer, Corporate and Insurance Services Division of theOffice of the Attorney General at 368-4550, or visit their office at 95 Rochford Street, 4th Floor Shaw Building, in Charlottetown.
The distinguishing features of a corporation (or \"limited company\") are:
* The limited company constitutes a legal entity and is distinct and separate from its shareholders, officers, and directors. This means that no shareholder of a company is personally liable for the debts, obligations, or acts of the company. However, lenders may require the shareholders to personally guarantee any loans to the corporation.
* There is a potentially greater source of capital available as people may invest without running the company.
* Ownership is readily transferable -- shares may be transferred without distributing the management of the business.
* Because the company is a separate entity it does not cease to exist with the death of a shareholder.
* There can be income tax advantages with an incorporated business, which should be discussed with a chartered accountant or other tax advisor.
There are two alternatives to incorporating a business:
1. If your business activity will be confined mainly to Prince Edward Island, then it is necessary to incorporate only as a provincial company. A person wishing to incorporate a company is required to
* have a name search conducted on the proposed name to ensure its availability at a fee of $40,
* register the name of the corporation at a fee of $265.00, payable to the Provincial Treasurer.
* engage a lawyer, and purchase some specific sundry items such as a corporate seal and minute book.
* complete annual filing requirements at a fee of $30.00.
2. Should your business plan include expansion of your company markets to other provinces, you may be required to register in each additional province as an extra-provincial company. Many companies are also incorporated federally if they are going to operate in several provinces of Canada, however, even a federally incorporated company is required to register as an extra provincial corporation in several provinces if the company conducts business there. It is recommended to discuss the costs and benefits on incorporation, including limited liability, tax deferral and use of losses, with an accountant and a lawyer before proceeding.
To register a provincial corporation, conduct a name search, or for more information, please contact Consumer, Corporate and Insurance Services Division of theOffice of the Attorney General at 368-4550, or visit their office at 95 Rochford Street, 4th Floor Shaw Building, in Charlottetown, or visit the Web site at: at: http://www.gov.pe.ca/infopei/onelisting.php3?number=44662.
For further information on Federal Incorporation, please call (613) 941-9042, see the documents Federal Business Incorporation - Canada Business Corporations Act (CBCA) and Statutory Filings under the Canada Business Corporations Act (CBCA), or visit the Web site at http://strategis.gc.ca/corporations.
An Incorporation Kit can be obtained from the Canada/PEI Business Service Centre at 1-800-668-1010.
If you plan to be involved with any product or by-product that may affect the air, water or land quality, watercourses, plants or animals via petroleum products, lead-acid batteries, beverage containers, or any other pollutant you are required to contact the Department of Environment, Energy and Forestry at (902) 368-5000.
Health Inspections and Permits
For the operation of any type of food service establishment, sleeping accommodations, senior citizens home, day care centre or related establishment, contact the regional office of the Department of Health at (902) 368-4970 or toll free (in province) at 1-800-958-6400.
Operating a business from home requires meeting the zoning by-laws controlling property uses in your area. In many jurisdictions, zoning approval is required. Please refer to the Building and Development Permits section for information on who to contact.
Music Licence (playing recorded music in public areas)
Performance of music in any public place, i.e.: restaurants, hotels, halls, offices, stores, etc., requires a licence. This licence is necessary whether the music is performed by live or recorded means.
The Society of Composers, Authors and Music Publishers of Canada (SOCAN) is authorized to administer the performing rights in musical works for composers, lyricists, songwriters and music publishers. Licences are then issued to music users who wish to publicly perform such works, in exchange for fees. The fees are then distributed as royalties to members of the society. The purpose of SOCAN is to ensure, as much as possible, that its members are compensated when their music is broadcast or performed in public. When an unlicensed performance of a musical work occurs, SOCAN will likely issue an invoice for payment of the specific licence fee under an approved tariff. It may also initiate a civil action if it believes that infringement of a copyright of one of its members has occurred.
For additional information, contact the Society of Composers, Authors and Music Publishers of Canada (SOCAN) in Dartmouth (NS) at: 1-800-707-6226, or visit he SOCAN website at http://www.socan.ca
PST - Prince Edward Island Revenue Sales Tax
New businesses starting retail operations in Prince Edward Island are required to apply for a Vendor Registration Certificate. Once the application is approved, the business is issued with a Vendor Registration Certificate which allows the business to purchase goods for resale exempt of provincial revenue (sales) tax. The registration of the business also requires the business to collect and remit tax on sales of taxable goods.
To assist the general public and new businesses in understanding the proper application of the provincial revenue (sales) tax, a number of aids have been produced. These include revenue tax guides and notices, which provide the necessary information on taxing goods, as well as a series of booklets dealing with revenue (sales) tax applications for specific groups. For more information see:
* Contractors: see the document Revenue Tax - Contractors
* Farmers: see the document Revenue Tax - Farmers
* Fishermen: see the document Revenue Tax - Fishermen
* Medical Equipment and Supplies: see the document Revenue Tax - Medical Equipment Suppliers
* Service Stations and Garages: see the document Revenue Tax - Service Stations and Garages
* Vendors: see the document Revenue Tax - Vendors
For further information, please call (902) 368-4070, or visit the Provincial Treasury at 95 Rochford Street, 1st Floor, Charlottetown Prince Edward Island or the Taxation and Property Records Web site at: http://www.gov.pe.ca/pt/tapr-info/index.php3
You may require additional licences depending on the type of business you will be operating. For instance, if you are opening a food catering business, you will require a licence from Health and Community Services. Please refer to other sections of this guide for more information on licensing and registration.
REGULATIONS AND LICENSES - EMPLOYEES
If you have employees, you will need information on payroll requirements and employment standards such as payment of wages, vacation pay, statutory holidays, notice of termination, minimum wage rates, overtime pay, and maternity and parental leave protection. The Labour and Industrial Relations Division can provide you with a complete payroll and employment standards information for Prince Edward Island.
For more information on employment standards, consult the document Employment Standards , contact the Labour and Industrial Relations Division at (902) 368-5550,toll free at 1-800-333-4362 or visit the Labour and Industrial Relations Web site at: http://www.gov.pe.ca/commcul/lair-info/index.php3.
The P.E.I. Human Rights Act protects the equality rights of everyone who lives in, works in, or visits P.E.I. All people in P.E.I. have equal rights in employment and equal access to services, accommodations and facilities. The P.E.I. Human Rights Act protects against discrimination based on the following: age, sex (including harassment and pregnancy), race, colour, religion, creed, marital status, ethnic or national origin, physical or mental handicap and political belief.
It is illegal to ask people to put age, sex, marital status or any other information which could lead to discrimination on an application form. You cannot refuse to employ a person for any of the reasons listed in the Human Rights Act.
For more information, visit http://www.gov.pe.ca/oag/hrc-info/index.php3
or call (902) 368-4180.
Labour Program - Compliance with Labour Standards
The Labour Program promotes and enforces employer and employee compliance with Part III of the Canada Labour Code (Labour Standards) and the Fair Wages and Hours of Labour Act (Fair Wages). Services through local and regional offices include inspections, investigations of complaints and unjust dismissals, client education, and provision of informational material.
For further information, please call (902) 566-7171, see the document Labour Standards in the Federal Jurisdiction Workplace or visit the Web site at http://www.hrsdc.gc.ca/en/gateways/topics/lxn-gxr.shtml
Safety in the Workplace
As an employer, you are directly responsible for health and safety of your workers because you have control of the workplace and have the power to effect changes. You must be familiar with the regulations that apply to your workplace and the tasks performed there. Under the Occupational Health and Safety (OHS) Act, you are required to take \"every reasonable precaution\" to ensure the health and safety of your employees. It is your responsibility to see that you and your employees comply with the Act and its regulations. This includes maintaining equipment, making workers aware of health and safety information, providing training and supervision necessary for health and safety, providing protective equipment, cooperating with safety committees and representatives, and reporting accidents. Some of the areas that fall under the OHS Act include: toilet & washing facilities, drinking water, first aid, ventilation, noise, stairs.
For more information, call Occupational Health and Safety Services toll free in PEI at 1-800-237-5049 or consult the Workers Compensation Board website at http://www.wcb.pe.ca
For further information on OHS in federal works, undertakings and businesses, including employment on ships, trains, aircraft, and in the oil and gas industry, please call 1-800-565-7757 or see the document Workplace Health and Safety in Canada.
Workers Compensation Deductions
The Workers Compensation Act is a law of the Province of Prince Edward Island. The Workers Compensation Board administers the Workers Compensation Act and the Occupational Health and Safety Act. Under the act, employers are protected against liability for injuries suffered by employees in the course of their work. Employees are insured against loss of earnings in the case of injury on the job. The Board awards compensation for loss of earnings capacity due to injury on the job, and in the case of death, awards benefits to surviving spouses, children and other dependents. Revenue for the Board\'s operations comes from assessments levied against employer payrolls.
Employers collectively pay for the cost of workers compensation by contributing to an \"accident fund\". Workers do not contribute to the accident fund, nor does government. The workers compensation system is funded entirely by employers. The employer is required by law to register with WCB upon the hiring of one person, regardless of that person\'s employment status (full-time, part-time, casual, temporary, etc.) There are a few industries that are exempt. The amount paid by employers depends on their industry group, the size of their payroll, and the cost of their claim.
To find out more information, contact the Workers Compensation Board Employer Services Division at (902) 368-5680, or visit their website at http://www.wcb.pe.ca
Even the smallest of businesses need some kind of record keeping / accounting system. As a business owner, you can choose to either hire an accountant (see the yellow pages of the telephone book for a complete list), or to keep your own records, possibly using a variety of commercially available software packages.
If you choose to keep your own records, you may wish to consult the document Basic Bookkeeping, or to drop into the Canada/PEI Business Service Centre to consult or borrow one of our books on accounting / record keeping.
In order to accept payments for services rendered that are payable to your business name, you will need to have a business chequing account at a bank or credit union.
If you plan to accept credit card payments or payment by debit card, you will need to complete the necessary forms at a bank/credit union to receive a Merchant ID. Each bank/credit union only provides the services of one credit card, therefore, if you wish to accept payments by both MasterCard and Visa, you will need to open a business chequing account and obtain a Merchant ID at 2 separate banks/credit unions. (IE, one bank for MasterCard, and one bank for Visa.) Once you are set up for credit card payments, your bank(s) will provide you with deposit slips to deposit your sales into the individual business chequing account, as well as cheques to withdraw out of these same accounts.
For more information, please contact your local bank or credit union.
A business plan is a written document of the overall strategic plan of your business. It describes what you intend to accomplish and how you plan to organize your resources to meet your goals. A well-written business plan is crucial for a successful business and will encourage you, the entrepreneur, to be realistic. It will help identify your customers, your market area, your pricing strategy and the competitive conditions under which you must operate to succeed. You will also need a well-organized business plan if you are to attract investors, obtain financing or preserve the confidence of your creditors.
The Canada/PEI Business Service Centre has many resources to assist you with your business plan development, including booklets, templates, internet sites, and books of sample business plans. For a Business Plan Guide, see the document Business Plan Guide, or for more information, please contact the Canada/PEI Business Service Centre at 1-800-668-1010.
A marketing plan is designed to direct company activities towards the satisfaction of customer needs, determine what the customer wants, develop a product/service to meet those needs, get the product/service to the end user and communicate with the customer.
The Canada/PEI Business Service Centre has many resources to assist you with your marketing plan development, including booklets, templates, and internet sites. For a Marketing Plan Outline, see the document Marketing Plan Outline, or for more information, please contact the Canada/PEI Business Service Centre at 1-800-668-1010.
CANADA/PRINCE EDWARD ISLAND BUSINESS SERVICE CENTRE
On-Site Services: Library, Public Terminals, Government Programs and Services, Business Start-Up Assistant, etc
The Canada/Prince Edward Island Business Service Centre (CBSC) is an innovative partnership of federal and provincial government departments. Both levels of government work with key private-sector organizations to support business start-ups, modernization and growth in Prince Edward Island.
The CBSC offers a wide variety of services, free of charge, including an extensive on-site Business Lending Library, Public Access Terminals for accessing business websites on the Internet, as well as Knowledgeable Staff to help guide you through your business start up.
There are many federal and provincial Government Programs and Services available to assist you in your new business. The Canada/PEI Business Service Centre maintains a database of these programs and services, available to you via our internet site http://www.cbsc.org/pe/english/bis.cfm
, and as well by speaking with an Information Officer by telephone, or in person at our office in Charlottetown.
Canada / Prince Edward Island Business Service Centre
75 Fitzroy Street, Charlottetown, PEI. C1A 7K2
Telephone: (902) 368-0771 or 1- 800-668-1010
Fax: (902) 566-7377
Internet site: http://www.canadabusiness.ca/pe/
The Business Start-up Assistant (BSA) is a one-stop website to start-up information from the federal and provincial governments, the community and many other sources. Information critical to starting a new business is organized by topics such as market research, financing, taxation, business planning, and many others. This easy to navigate site also provides links to federal and provincial forms for registering your business, and can be accessed at http://www.cbsc.org/bsa.
Community Resource Sites and Aboriginal Service Sites
Some of the services of the Canada/PEI Business Service Centre can also be accessed around the province at the six Community Resource Sites and at the Aboriginal Service Sites listed below. Each of these sites offers a selection of our most popular reference books, many of which can be borrowed.
COMMUNITY RESOURCE SITES:
Access PEI - Souris
15 Green Street
Tel: (902) 687-7000
Access PEI - Montague
41 Wood Island Hill
Tel: (902) 838-0600
Access PEI - Summerside
120 Harbour Drive
Tel: (902) 888-8000
Baie Acadienne Development Corp.
48 Mill Road
Tel: (902) 854-3439
Central Development Corporation
Central Bedeque, PE
Tel: (902) 887-3400
West Prince Ventures
Alberton Business Centre
455 Main Street, Alberton
ABORIGINAL SERVICE SITES:
Abegweit First Nation
Mount Stewart, PE
Tel: (902) 676-2353
Lennox Island First Nations
Lennox Island, PE
Tel: (902) 831-2799
Native Council of PEI
6 F.J. MacAulay Court
Tel: (902) 892-5314
Business Resource Link