Establishing the proper structure for your business, before you start your business is extremely important!
In fact, if you fail to establish the proper structure in the beginning, it can be very difficult to change later and it could end up costing you thousands of dollars annually in taxes. Our Services are all available at a very low, affordable price, generally at a fraction of the cost that others charge.
Your Corporate Minute Book is a very important component of you Business Documents.
Sure, there are lots of ‘do it yourself’ incorporation services out there, but do they give you advice and guidance based upon your personal tax situation? Will they take the time to understand your plans for succession? Will they look at tax saving strategies? Will they look at your family situation and look at future tax planning scenarios?
- Should you register for GST?
- Do you need a payroll deductions account?
- Do you need a municipal business license?
- Do you need to register for Provincial Health Taxes?
- Should you incorporate because ‘your neighbour told you to’?
All of these items should be considered BEFORE you incorporate your business!
Corporation or Sole Proprietor?
One of the most important questions you should consider is “Do I need to Incorporate?”
A Canadian Controlled Private Corporation (CCPC), also known as a Corporation or Company, will have Limited, Inc. etc. after their name. A corporation is an entirely separate legal entity and is treated as having its own legal personality, which is distinct from its owners, (Shareholders) and the individuals responsible for running the Corporation (Officers and Directors).
To qualify as a CCPC, the shareholders of the Corporation must be Canadian Residents.
A proprietorship is an unincorporated business entity entirely owned by an individual, resident of Canada. Examples of a typical proprietorship would include:
• A bookkeeper, operating from their home part-time to earn extra income.
• A handyman, operating from their home part-time to earn extra income.
A proprietorship is likely the most common form of business structure in Canada.
Income from a proprietorship is reported on the individual’s tax return (T1 Schedule 2125) and is generally not subject to many additional provincial or federal rules, with the exception of proper financial reporting on the tax returns. The Sole Proprietorship is the simplest form of operating a business. Only one person is responsible for decision making and therefore earns all of the profits or incurs all of the losses of the business, however, the same individual also incurs all of the risk and obligations associated with running a business.