This morning I have some construction guys in fixing our floor boards, it’s loud and noisy. Since I can’t concentrate fully on work stuff, I thought I’d blog about how to set up a Sole Proprietorship in British Columbia. I’ve been asked a few times now and there’s not too much “sane” information on the interwebs about it.

When going out to start a business I had done a bunch of research and there were several reasons I chose to go down the Sole Proprietorship route:

1. Setting up shop as a Incorporated business is expensive. The fees by themselves are several hundred dollars and most people I talked to about it recommended talking to a lawyer in terms of structure, articles of incorporation, etc.
2. Running an Incorporated business requires lots of paperwork and procedural overhead. While there’s many tax advantages and related benefits to running an corporation, since I’m mainly service/consulting based, I’m not able to really take too much advantage of these benefits.
3. If my situation changes, I can always convert to a corporation.
4. Doing business under my own name, while not requiring any paperwork just didn’t seem as professional to me and since I’d have a turnover of over $30,000 a year I would have to register  for a BN (GST registration) anyway (which I believe you need a sole prop for at a minimum).
5. It’s early days yet, after a year I’ll have a better understanding of my situation and what options I have available to me.

Starting a Sole Proprietorship

Finding a name

The first part of the equation is to find a name. In British Columbia (perhaps Canada) you can’t just call yourself “Widgetilizer” or “Socialflies”. You need to have a “distinctive” element and a “descriptive” element in your name. In my case the distinctive element was “Cloudtone” and the descriptive element was “Studios”. Thinking back on it now I probably should have used a different descriptive element, but it’s sane enough for the industry I’m in.

Once you have come up with a name, you then need to register it with BC Registry Services. I walked into the Small Business BC centre at Waterfront station, got a name request form, filled it out and paid $40 or so to have that validated. After several phone calls and waits due to user error at the waterfront centre I finally got my name approved. The process took me about 2-3 days to get confirmation in the end once the error had been fixed. Once you have received approval for that name you have about 2 months to apply for either a Sole Proprietorship or Corporation using that name.

One important note is that this approval is just permission to trade under that name, it doesn’t supply you with protection over that name at say for example, a federal level. While I did the name request in person, I have found that it’s possible to do it from the comfort of your living room at BC Registry Services.

Registering a Sole Proprietorship

This process is entirely doable online again via BC Registry Services. You can setup an account on the “OneStop” site which will help guide you through the process, with nessecary paperwork and will ask you to fill out more information as and where required (for example, If you were to have employees, you also need to fill out several other registrations). For me I ended up only filling out a few more forms than the registration requirements, however I’ll need to go back into my profile to register for some things around BN and CPP things.

The registration online take about 30-40 minutes, is instant (you can print off your registration) and costs $40 to do online.

Wrapup

While the process is pretty simple, the problem I had was tht there is very little advice available as to how best to decide wether you want to go the sole proprietorship or incorporation route. I’d advise anyone thinking the same thing to talk to other business owners as all that Small Business BC will do is refer you to a lawyer.

While I have some issues with Small Business BC, I’ve found that the services they provide are pretty good and they also do several talks and workshops at their Waterfront branch on a range of topics from financials to technology to marketing. I think I’ll probably attend some of these at some point.

The OneStop service was delightful to work even if it looks and navigates like crap. I’ve had the experience before of being a limited company director before in the UK and it was a real pain to get even the registration through. By comparison, the abilty to do everything instantly was a major boon in the tight timelines that I had.

Hopefully I’ll have more small business stuff to write up at some point, but for now, it’s back to the grindstone.