There are many steps you need to complete in the first few weeks of planning, but one of the first things you will have to determine is the type of structure or ownership your business will have. You need to decide this in order to register your business to legally operate in Ontario.
There are different forms of legal structure you can choose from however, the most common forms of ownership are Sole Proprietorships, Partnerships and Incorporation and each have their own advantages and disadvantages…
Sole Proprietor – This is where the business and the owner are the same legal entity.
Owned by one person
Low start-up cost
Difficult to raise capital
Credit is dependent on the owner’s personal credit
Partnership – A partnership is where two or more individuals share ownership of the business.
Ease of information
Easy to start
Shared work duties
Partners often have conflicts
Liable for all debts and obligations
Partnership agreement is required
Incorporation – A new separate legal entity is established.
Limited legal and financial liabilities
Continue its existence
Ownership is transferable
Expensive to start
More complex record keeping
If you are unsure of the type of ownership you should consider, you should discuss your options with a business consultant at your local Business Enterprise Centre, and seek legal advice.