Business Number in Canada

Sep 4, 2023

The business number (BN) is a identification number consisting of nine digits that is provided by the Canada Revenue Agency (CRA) to your business or nonprofit organization for tax purposes. This number is specific to your organization and is required when interacting with the federal government and some provincial governments.

Discover the reasons for needing a business number and the various ways you can make use of it in your interactions.

 

What Is a Canada Revenue Agency Business Number?

If you do any of the following, the Canada Revenue Agency (CRA) will assign a business number to your business:

– Incorporate it on a federal level.
– Enroll in any CRA program accounts, such as the GST (a 5% federal tax on goods and services) or the HST (a combined federal-provincial sales tax, applicable in Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island).
– Register or incorporate it in certain provinces: Alberta, British Columbia, Manitoba, Nova Scotia, New Brunswick, Ontario, Prince Edward Island, Saskatchewan.
– Use the Business Registration Online service when registering.

The purpose of the business number is to facilitate the identification of a business by all levels of government. Additionally, it prevents confusion between entities with similar or identical names.

The province of Quebec has a different system for identifying businesses. Registraire des entreprises Québec assigns 10 -digit Québec enterprise numbers. And Revenu Québec handles payment of the GST and HST.

How Does a CRA Business Number Work in Canada?

Businesses and nonprofits use a 15-digit CRA program account number that includes the Business Name for reporting specific activities to the CRA. The first nine digits represent the business number, followed by a two-letter program identifier, and finally, a four-digit reference number that identifies the particular account. This reference number allows companies to have multiple accounts for different business activities.

The program identifier for GST/HST is RT. Below is a chart providing the identifiers and purposes of other major program accounts:

Type of Program Account Identifier Purpose
Payroll deductions RP Enables companies to calculate and report deductions from employees’ pay
Import-export RM Enables the CRA to process customs documents for businesses that import or export products
Corporation income tax RC Enables companies to file their income tax and determine tax rates
Registered charity RR Enables the filing of charitable donation receipts
Information returns RZ Enables companies to file many different types of information returns with the CRA, including those for securities transactions, registered retirement savings plans, and pooled registered pension plans

 For example, a payroll account number may look like this:

112233445 RP 0001

If the company creates a second payroll account, the account number would logically be:

112233445 RP 0002

The CRA has a list of lesser-used program accounts on its website, including the air travelers security charge (RG) for airlines and softwood lumber (SL) for those who export soft lumber products.

Do I Need a Business Name in Canada?

If your company doesn’t need to join the CRA programs mentioned earlier or register federally or with any of the eight provinces mentioned earlier, it doesn’t need a Business Number (BN).

The CRA’s website provides a helpful chart to determine if your business or nonprofit should collect GST/HST. If your revenue or sales don’t surpass specific thresholds, you qualify as a small supplier and are not required to charge these taxes. Similarly, if your business provides exempt supplies like legal aid services and music lessons, you are also exempt from charging GST/HST.

 

Use of Business Names for Provincial Programs

Different provinces have collaborated with the CRA to utilize BNs for their respective initiatives. To illustrate, if your company is situated in Winnipeg and you register it with the province of Manitoba, you can employ your BN to fulfill provincial and city tax obligations, as well as acquire licenses and permits from the city. Manitoba’s program identifier is MT, while Winnipeg’s is MM.

Moreover, the provinces of Alberta, British Columbia, New Brunswick, Nova Scotia, and Saskatchewan (via ISC) can also furnish your business with a BN and grant you permission to utilize it for specific provincial programs.

 

Changing a Business Name in Canada

If a company undergoes a change in ownership, partnership, or directorship, it might be necessary to acquire a new BN, depending on the company’s structure. Altering the company’s structure may also necessitate changing its BN.

When selling or shutting down your business, it’s advisable to get in touch with the CRA to inform them about relinquishing your BN and closing your CRA program accounts.

A business number (BN) is a nine-digit number the Canada Revenue Agency (CRA) assigns to a business or nonprofit as a tax ID.

A business number (BN) is a nine-digit number the Canada Revenue Agency (CRA) assigns to a business or nonprofit as a tax ID.

 

One purpose of the BN is to enable governments to easily distinguish between like-named or similarly named entities.

A BN is also used as part of 15-digit CRA program account numbers that businesses and nonprofits use when reporting on certain activities to the CRA, including paying taxes and making deductions from employees’ paychecks.

Six provinces have adopted the use of CRA BNs and enable companies to identify themselves with their BN when reporting information to those provinces.

 

CBES is here to assist you; feel free to contact us for expert guidance.

 

Business Registration in Ontario (Sole Proprietorship, Partnership, or Corporation)

 

 

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