What Is the CRA Business Number - Why & How To Obtain It

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Author: Maryam Ajorloo, CPA

Editor: Behdad Karimi, CPA

What is a Business Number (BN) in Canada?

A Business Number (BN) is a unique nine-digit identifier assigned to your business by the Canada Revenue Agency (CRA). Think of it as your business’s social insurance number—it’s essential for managing your interactions with the federal government.

The BN is used to streamline and centralize the tax accounts your business may need to operate legally in Canada. It acts as a foundational number to register for various government programs. Three main common CRA program accounts a business may need are:

• Goods and Services Tax/Harmonized Sales Tax (GST/HST)

• Payroll deductions

• Corporate income tax

  
  

Having a BN doesn’t mean you have to register for all these programs right away; you can register only for the accounts your business currently requires.

Why Do You Need a Business Number?

1. Legal Compliance

If your business earns taxable income or collects GST/HST, a business number is mandatory. Without it, you can’t file taxes properly or charge GST/HST, which could lead to penalties.

2. Simplified Government Transactions

The BN simplifies interactions with the CRA by consolidating all your accounts under one number. This reduces confusion and saves time, especially during tax season.

3. Professionalism and Credibility

Many clients, especially larger organizations, prefer working with businesses that have a registered BN. It signals that your business operates legitimately and adheres to Canadian regulations.

4. Growth Opportunities

A BN is often required when entering into contracts with other businesses, applying for government grants, or registering for other permits and licenses.

How to Get a Business Number

Getting a business number is a straightforward process, and there are several ways to register:

Step 1: Determine Eligibility

You need a BN if:

• You are a sole proprietor, partnership, corporation, or other legal business structure operating in Canada.

  • Exception: if you are self-employed, making less than $30k and operating under your personal legal name, you do not need a BN.

• Your business collects GST/HST or has employees (for payroll deductions).

• You need to file corporate income tax or import/export goods.

  
  

Step 2: Gather the Required Information

Before applying, ensure you have the following details ready:

• Business Legal Name: The official name of your business (e.g., John Doe, Sole Proprietor, or XYZ Inc.).

• Business Structure: Specify if your business is a sole proprietorship, partnership, or corporation.

• Business Address: The physical and mailing address of your business.

• Nature of Business Activities: A description of what your business does.

  
  

Step 3: Choose Your Registration Method

You can apply for a BN through:

• Online: Use the CRA’s Business Registration Online (BRO) system. This is the quickest and easiest method.

• By Phone: Call the CRA’s Business Enquiries line.

• By Mail: Fill out Form RC1 (Request for a Business Number) and send it to the CRA.

  
  

Real-Life Example

Sarah, a Freelance Graphic Designer in Toronto, decided to expand her business. She started getting inquiries from large corporate clients who asked for invoices with GST/HST details. Since Sarah’s annual revenue exceeded $30,000, she was required to register for GST/HST.

To comply, Sarah applied for a Business Number online and registered for a GST/HST account under her BN. With her new BN, Sarah was able to issue professional invoices, charge GST/HST, and claim input tax credits for the expenses she incurred in her business. This not only enhanced her business's credibility but also helped her track her finances more effectively.

Sarah used ReInvestWealth accounting software to manage her bookkeeping and track GST/HST filings efficiently. The software provided a user-friendly platform to record transactions and generate accurate reports, saving her time and ensuring compliance with CRA regulations.

Benefits of Having a Business Number

1. Efficient Tax Management

With a BN, it’s easier to manage your tax obligations. For example, if you need to register for GST/HST, your BN is used as the foundation for that account.

2. Required for Invoicing with GST/HST

If your business earns more than $30,000 in revenue annually, you are required to charge GST/HST. A BN enables you to register for GST/HST and ensures compliance when invoicing clients.

3. Simplified Expansion

A BN makes it easier to expand your operations. For instance, if you start importing or exporting goods, your BN can be used to register for an import/export account without starting from scratch.

4. Access to Government Support

Many government grants, loans, and programs require a BN. Having one ensures you won’t miss out on these opportunities.

How ReInvestWealth Can Help You

Managing your business finances effectively is critical. ReInvestWealth offers comprehensive accounting solutions tailored for small businesses in Canada. With tools to:

• Track income and expenses automatically.

• Simplify GST/HST calculations and filings.

• Generate financial reports such as profit and loss and balance sheet statements.

ReInvestWealth makes compliance and financial management effortless so you can focus on growing your business.

Conclusion

A Business Number in Canada is more than just a regulatory requirement—it’s a foundational tool for running a professional and compliant business. From simplifying your dealings with the CRA to enhancing your business’s credibility, the benefits are significant.

If you’re starting a business, obtaining a BN should be one of your first steps. It’s simple, and essential for setting your business on the path to success.

Frequently Asked Questions

Do I need a business number if I’m a sole proprietor?

Yes, if you need to register for GST/HST, payroll deductions, or other CRA programs. However, if your annual revenue is less than $30,000 and you don’t need to register for these programs, a BN might not be necessary.

Is there a cost to apply for a business number?

No, applying for a business number is completely free.

How long does it take to get a business number?

If you apply online or by phone, you’ll receive your business number immediately. Applications by mail take longer, usually a few weeks.

Can I use the same business number for multiple businesses?

No. Each legal business entity requires its own unique business number.

What happens if I don’t get a business number?

Without a BN, you cannot register for essential CRA programs like GST/HST or payroll. This could result in legal or financial penalties if your business is required to comply with those obligations.

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Disclaimer

The content of this blog post is for informational purposes only and does not constitute accounting, tax, business, or legal advice. While ReInvestWealth offers professional accounting and tax advice through paid consultations with a CPA, the information provided here is general in nature and may not be applicable to your specific circumstances.