Sole Proprietorship: Compliance

This page consolidates the registration, filing, remittance, and record-keeping obligations of a sole proprietorship. Because the proprietorship is not a separate legal person, most obligations are those of the proprietor personally. Dates assume a December 31 fiscal year-end, which is mandatory for an individual unless an alternative year-end is elected under section 249.1 of the Income Tax Act.

REGISTRATIONS AT COMMENCEMENT

• Business name registration with the provincial or territorial registry where the business operates under a name other than the proprietor's legal name (renewable every five years in Ontario).

• CRA business number and program accounts as required: GST/HST (RT) within 29 days after taxable supplies exceed the $30,000 small supplier threshold, or voluntarily; payroll (RP) before the first remittance for employees; import-export (RM) for commercial imports or exports.

• Provincial sales tax: PST in British Columbia and Saskatchewan, RST in Manitoba, and QST in Quebec, where taxable supplies are made.

• Workers' compensation registration where employees are engaged in a covered industry, and optional personal coverage for the proprietor.

• Municipal business licence, zoning approval, and industry-specific provincial licences or permits.

• Registration for EI special benefits for the self-employed, where desired, at least twelve months before any claim.

RECURRING OBLIGATIONS

Monthly or quarterly

• Payroll source deductions and employer contributions for employees: by the 15th day of the month following payment (regular remitter) or quarterly for eligible small employers.

• GST/HST returns for monthly or quarterly filers: one month after the end of the reporting period.

• Provincial sales tax returns on the schedule assigned by the province.

• Personal income tax instalments: March 15, June 15, September 15, and December 15, where net tax owing exceeds $3,000 ($1,800 in Quebec) in the current year and in either of the two preceding years.

Annual

• Last day of February: T4 slips and T4 Summary for employees (RL-1 in Quebec); T4A slips for fees paid to subcontractors where required.

• April 30: payment of the balance of personal income tax, CPP contributions on self-employment earnings, and, for annual GST/HST filers, the GST/HST balance.

• June 15: T1 return with Form T2125 (and Form TP-80 with the TP-1 in Quebec); annual GST/HST return for individual registrants.

• Annual employer health tax return where applicable (March 15 in Ontario; March 31 in British Columbia).

• Workers' compensation annual reconciliation of insurable earnings, on the board's schedule.

• Renewal of municipal licences and business name registrations as they fall due.

Event-driven

• Record of Employment within five days after an employee's interruption of earnings.

• Updates to the business name registration on change of address, name, or activity.

• Deregistration of program accounts and notification of the CRA on cessation of the business; final GST/HST return and final payroll filings.

• Form T1135 where specified foreign property exceeds $100,000 at any time in the year.

RECORD-KEEPING

• Books and records retained for six years from the end of the last taxation year to which they relate.

• Logbook for motor vehicle use and records supporting business-use-of-home expenses.

• Capital cost allowance schedules and asset acquisition and disposal records retained for six years after disposition.

• Separate business bank account and segregation of personal and business transactions.

PROVINCIAL AND TERRITORIAL VARIATIONS

• Quebec: annual updating declaration with the Registraire des entreprises where registered; TP-1 and TP-80; QST returns and Quebec source deductions filed with Revenu Québec.

• British Columbia, Saskatchewan, and Manitoba: provincial sales tax registration and returns administered by the provincial ministry.

• Ontario and the Atlantic provinces: HST filed with the CRA on the GST/HST return.

• Alberta and the territories: no provincial sales tax; Northwest Territories and Nunavut payroll tax withheld from employees.

RELATED PAGES

• Sole Proprietorship: Federal and Provincial Requirements.

• Sole Proprietorship: Tax; Sole Proprietorship: Payroll.

• Compliance Requirements (overview); Regulating Bodies.

SOURCES

• Canada Revenue Agency, Guide RC4070 Information for Canadian Small Businesses; Business Tax Filing Due Dates.

• Canada Revenue Agency, Guide T4002; Guide RC4022.

• Provincial business name registries and ministries of finance.