Guide to RC1 Business Number Registration

If you are a newcomer starting a business in Canada, one of the first steps is getting a Business Number (BN) from the Canada Revenue Agency. The BN is a unique 9-digit number that identifies your business to federal, provincial, and municipal governments. Form RC1, "Request for a Business Number and Certain Program Accounts," is the official CRA form for this registration.

What Is a Business Number?

A Business Number (BN) is like a Social Insurance Number, but for your business. It is a 9-digit number assigned by the CRA. Attached to your BN are program accounts identified by a two-letter code and a four-digit reference number. The program accounts are:

• RT - GST/HST account (for charging and remitting sales tax)
• RP - Payroll deductions account (for withholding tax, CPP, and EI from employees)
• RM - Import/export account (for importing or exporting commercial goods)
• RC - Corporate income tax account (for incorporated businesses filing corporate tax returns)

For example, if your BN is 123456789, your GST/HST account would be 123456789 RT 0001.

Who Needs a Business Number?

You need a BN if any of the following apply:

• You need to register for GST/HST (revenues over $30,000 or voluntary registration)
• You plan to hire employees (you need a payroll account)
• You import or export commercial goods
• You incorporated a business in Canada

If you are a sole proprietor with no employees and revenues under $30,000, you technically do not need a BN. However, getting one is still a good idea because many clients and suppliers will ask for it, and you will need it eventually as your business grows.

How to Complete Form RC1

Part A: Business Identification

1. Legal name: For a sole proprietorship, this is your personal name. For a corporation, it is the registered corporate name. For a partnership, it is the partnership name.
2. Operating or trade name: If your business operates under a different name (a "doing business as" name), enter it here.
3. Business address: The physical address of your business. This can be your home address if you operate from home.
4. Mailing address: Where you want to receive CRA correspondence. Can be the same as your business address.
5. Language preference: English or French.

Part B: Type of Business

1. Type of ownership: Select sole proprietorship, partnership, or corporation. If you are unsure which structure is right for your business, consider consulting with a business advisor or accountant.
2. Business activity: Describe what your business does in plain language (for example, "residential cleaning services" or "software development consulting").
3. NAICS code: The North American Industry Classification System code for your business. The form includes common codes, or you can look up your code on the Statistics Canada NAICS page.
4. Fiscal year-end: For sole proprietors, this is always December 31. Corporations can choose a different fiscal year-end.

Part C: Owner Information

1. Enter the SIN, name, and address of each owner or partner
2. For corporations, enter the directors' information
3. Provide a contact phone number

Part D: Program Accounts

Check the boxes for the program accounts you need:

• GST/HST (RT): Check this if you need to charge sales tax. Enter your expected revenue and your preferred reporting period (annual, quarterly, or monthly). See our guide to applying for a GST/HST number for details.
• Payroll (RP): Check this if you will have employees. Enter the expected number of employees and pay frequency.
• Import/Export (RM): Check this if you will import or export commercial goods.
• Corporate Income Tax (RC): This is usually set up automatically when you incorporate. If not, check this box.

Three Ways to Register

1. Online (Recommended)

The fastest way is through the CRA Business Registration Online service. You can register and receive your BN immediately. You will need your SIN and personal information to verify your identity.

2. By Phone

Call the CRA business enquiries line at 1-800-959-5525. An agent can complete the registration for you over the phone. Have all the information from the RC1 form ready before you call.

3. By Mail

Download Form RC1 from the CRA website, fill it out, and mail it to your tax services office. This method takes several weeks.

After You Get Your Business Number

Once you have your BN and program accounts, here is what to do next:

• Set up CRA My Business Account: This online portal lets you manage your program accounts, file returns, make payments, and check your account status
• Open a business bank account: Most banks require your BN to open a business account
• Start charging GST/HST: If you registered for an RT account, begin adding tax to your invoices
• Set up payroll: If you have employees, configure your payroll system to withhold income tax, CPP, and EI contributions
• Register for provincial taxes: In BC, you may need to register separately for PST with the BC government and for WorkSafeBC coverage

Common Mistakes for Newcomer Entrepreneurs

1. Confusing BN with incorporation: Getting a BN does not mean your business is incorporated. Sole proprietorships and partnerships also have BNs. Incorporation is a separate legal process done through the provincial or federal government.
2. Not registering the business name: In BC, if you operate under a name other than your own legal name, you must register it with BC Registry Services. This is separate from the CRA registration.
3. Waiting too long to register for payroll: If you hire your first employee before getting a payroll account, you cannot properly withhold and remit deductions. Register before your first employee starts.
4. Using your SIN instead of your BN: Once you have a BN, use it for all business-related CRA correspondence. Your SIN is for personal tax matters only.

Provincial Business Registration in BC

In addition to the federal BN, BC businesses may need to:

• Register your business name with BC Registry Services
• Obtain a municipal business license from your city (for example, the City of Vancouver, Surrey, or Burnaby each have their own licensing requirements)
• Register for WorkSafeBC if you have employees
• Register for PST if you sell taxable goods

For more on starting a business as a newcomer, visit our guide to T5018 contract payments and our newcomer resources page.

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