New business guide: Part 5 – legal business structure.
Registering your business is one of the most important steps. You must decide business structure, which legally affects everything from how you file your taxes to your personal liability.
- Sole proprietorship. A sole proprietorship is an unincorporated business that is owned by one individual. It is the simplest kind of business structure. If you own the business entirely by yourself and plan to be responsible for all debts and obligations, for further details visit: https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/setting-your-business/sole-proprietorship.html. Be warned that this route can directly affect your personal credit.
- Partnership. A partnership is an association or relationship between two or more individuals, corporations, trusts, or partnerships that join together to carry on a trade or business. A partnership has clear advantages and disadvantages, to learn more visit: https://www.canada.ca/en/revenue-agency/services/tax/businesses/small-businesses-self-employed-income/setting-your-business/partnership.html.
- Corporation. By forming a corporation, you can protect yourself from some personal liability. To learn more visit: https://www.canada.ca/en/services/business/start/register-with-gov/register-corp.html
It is up to you to decide which fits your needs best. This process is a permanent one and must be done before you embark on your endeavours. If you are having some problems, consult a specialist. Many headaches can be solved by them.
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