Getting started - business 101
Before you start
This page provides basic information on starting a business and how operating a business in Calgary is regulated.
All businesses operating in Calgary are required to register the business with The City, obtain a Business ID and a land use approval for the business location. The required approvals vary for each business licence type. For more information on specific business types, visit Understanding Business Licence Requirements.
Do I need a business licence?
Although not all businesses are required to obtain municipal licensing, all businesses that operate within Calgary are required to register with The City to obtain a business identification number (BID), and are required to obtain land use approval for the business location even if it does not require a licence.
To find out if your proposed business activity would require a business licence and the necessary approvals required, visit our Business Guide to find your business activity type.
The City of Calgary has a responsibility to ensure businesses operating within Calgary are registered or licenced municipally. This is to ensure proper regulations and safety rules are being followed, that businesses are located appropriately and to ensure all businesses are treated fairly.
To regulate business activities within The city, bylaws define what businesses need to be licensed, what types of approvals they require and how they will be inspected to ensure the rules are followed. This provides customer protection and ensures that businesses are held to a fair operating standard.
When you are ready to apply, The City will let you know your required approvals.
How can The City help you start your business?
The City of Calgary can assist your business to determine the licensing and permit requirements needed to open and operate. More information regarding these requirements can be found at Understanding Business Licence Requirements.
In addition to understanding the regulatory requirements, taking time to plan what your business will do, how it will be owned and how you plan to maintain and grow your business will save you time in the future and make your business more successful.
Here are some resources that may be useful for your business:
A business plan puts all of your business ideas into one place. It should layout what your business will be called, what your business will do and how you plan to profit, maintain and grow your business. While not a requirement, a business plan will help you to find your competitive advantage and understand your business in more detail.
Resources for developing your business can be found below:
What should I have in place before contacting The City of Calgary to open up my business?
Choosing where you plan to operate your business is a key step in starting a business within The City. Businesses can operate in the following ways:
Commercial based location
Your business will be run from a commercial or industrial location in Calgary.
Home based location
Your business will be run from your home in Calgary
Based out of town
Your business will be based outside Calgary, but you will be conducting business within The city.
Your business will operate on a mobile basis. Mobile businesses are still required to have a base location, whether it be home-based or commercial-based
Businesses are location specific, each business location is required to obtain Land use approval prior to being approved to open and operate (with the exception of business that are based out of town). Land use approval is achieved through one or more of the following permit types. The permits your business will require will depend on the space you are proposing to operate the business as well as the type of business activity that will take place. You may require a combination of permits to obtain the appropriate approvals for your licence.
There are a number of variables that The City reviews to determine which application type you require for land use approval.
These factors include:
- Whether the use is listed as permitted or discretionary within the land use district
- If the parking requirements are changing
- If the business is proposing alterations or renovations to the space
- If the activity change requires a building safety review
To assist in determining which permit you will require, contact the Planning Services Centre. A planning services technician will take into consideration the land use district, proposed business activities and historical approvals for the address provided.
Determining your business ownership is something you must complete prior to registering a business with The City.
A business can be owned by one or more people, partnerships, corporations or a combination of these. The basic business ownership categories are listed below.
This is the simplest way to set up a business. A sole proprietor is fully responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor has a right against all of his or her assets, whether business or personal. This is known as unlimited liability.
This type of business comes under provincial jurisdiction. If the proprietor chooses to carry on a business under a name other than his or her own, he or she must register their tradename with the province. This registration will be valid for a certain number of years.
If a sole proprietor establishes a business in his or her own name, without adding any other words, it is not necessary to register the business with the province at the registry office.
A partnership is an agreement in which two or more persons combine their resources in a business. To establish the business terms and to protect partners/shareholders, an agreement should be drawn up with the assistance of a lawyer. Partners share in the profits according to the terms of their agreement.
General partnership: All members share the management of the business and each is personally liable for all the debts and obligations of the business. This means that each partner is responsible for and must assume the consequences of the actions of the other partner(s).
Limited partnership: Some members are general partners who control and manage the business and may be entitled to a greater share of the profits, while other partners are limited partners and contribute only capital. Limited partners take no part in control or management and are only liable for debts to a specified extent.
Limited liability partnership: This type of partnership consists of partners in eligible professions such as optometry, medical practice, accounting or law. Unlike a general partnership, a limited liability partnership protects uninvolved partners from personal liability arising from the negligence, wrongdoing, or misconduct of a partner, employee, agent or representative of the partnership that occurs in the ordinary course of the practice of the particular profession. Partners in a limited liability partnership may be individual practitioners or professional corporations.
A corporation is a legal entity that is separate from its owners, the shareholders. No shareholder of a corporation is personally liable for the debts, obligations or acts of the corporation. This type of business can be incorporated at either the federal or provincial level.
A corporation is identified by the terms Limited, Ltd, Incorporated, Inc, Corporation or Corp. Whatever the term, it must appear with the corporate name on all documents, stationery, and so on, as it appears on the incorporation document.
Private corporation: A private corporation can be formed by one or more people. A majority of its directors must be Canadian residents. If none of the directors reside in the province in which it does business, the corporation must appoint a power of attorney who resides in the province. A private corporation cannot sell shares or securities to the general public.
Public corporation: A public corporation issues securities for public distribution. Besides filing incorporation documents, a public corporation must file a prospectus with the appropriate Securities Commission in the province, must employ outside auditors and must distribute semi-annual financial statements.
Federal corporations: Private and public corporations may be incorporated federally under the Canadian Corporations Act. A firm operating nationally or in several provinces may find this advantageous.
Extra provincial corporation
If a company is incorporated federally or provincially outside of Alberta, the Province of Alberta requires the business to be registered extra-provincially to carry on business. As per Alberta's Business Corporations Act, any corporation formed outside of Alberta must register as an extra-provincial corporation within thirty days of commencing business.
This applies to:
- Companies incorporated federally
- Companies incorporated in a different province
- Limited and limited liability partnerships
- Companies incorporated in the United States
This does not apply to:
- Sole proprietors
- General partnerships
Understanding the details of how you want to run your business is an important step in order to determine the licence and permit requirements your business will require in order to operate. For example, as a home based business how many client visits to the home per week will you anticipate? Or as a restaurant do you intend to prohibit minors at any time? These details are necessary in determining the approvals for your business type.
A business name, or trade name, is used to represent your business to the public. Registering a trade name means that you let the province know you are using that name. Trade names can be registered at any Alberta registry.
While it is not a requirement to register a trade name for a municipal licence, it may be required to obtain a bank account in your company name. Corporations and registed partnerships will automatically register the tradenames when they register the corporation or partnership with the province.
While a trade name registration does not grant ownership of the name, it allows you to have proof that the name you chose is associated with your business.
What are other things to consider?
The timeline to obtain City approval for a business licence or registration can vary significantly depending on the permits and approvals that are required for your business type and location. This is why it is important to understand what your business will require prior to making any long-term commitments to a space.
Timelines and processes for permits required for commercial based and home based businesses can be found at Start a business.
Timelines associated with all other licence inspections and approvals can be found in the Business Guide.
Whether your business is a sole proprietorship, a partnership or a corporation, you need to pay taxes on your profits. A bookkeeper or accountant will be the best source of information on the tax process. Find out more information on provincial taxes.
For federal tax information, visit the Canada Revenue Agency.
GST for businesses
The Canada Revenue Agency has rules to determine if you are required to collect GST. If you are required to collect GST, you need to register an account with the Canada Revenue Agency to receive your GST number.
The Canada Revenue Agency can be contacted by:
A Business Improvement Area (BIA) is established by businesses in an area to jointly raise and administer funds for various projects and promotional activities within the zone throughout the year. Businesses located in a BIA will receive a BIA tax bill. This levy is collected by The City of Calgary on behalf of the BIA.
In an effort to help businesses in our communities, business tax was eliminated in 2019.
Data created when businesses open, move, change ownership or close is important in maintaining accurate assessment records to determine the amount of business improvement area (BIA) tax.
Businesses may be liable for two types of taxes: business improvement area (BIA) tax and property tax.
Business improvement area (BIA) tax
Business improvement area (BIA) tax is billed annually to any business that occupies commercial space within an established business improvement area (BIA) in Calgary. It does not reflect a specific type of business or the profit of a business.
Property tax is paid by landowners and is based on the assessed property value.
- Home-based businesses: Home-based businesses do not pay business improvement area (BIA) tax, as they do not occupy a commercial space.
- Non-resident businesses: Non-resident businesses do not pay business improvement area (BIA) tax or Calgary property tax, as they are not located within the municipality. This is the primary reason for the non-resident surcharge being added to these business licences.
- Subtenant businesses: Subtenant businesses may or may not be responsible for paying business improvement area (BIA) tax, depending on the lease agreement.
For more information on the administration or collection of business improvement area (BIA) and property taxes, visit Business Improvement Area (BIA) Tax or contact 311.