Do you have a business? Is your business a company, proprietorship, or something else? What’s the difference, and does it matter?
In BC there are a few ways to own and operate a business. Most business owners start out as a “proprietorship” meaning they own all of the business’ assets and debts personally. Any income from that business is personal income to the owners. As your business grows, you might wonder if you should start a company. This is a big step for business owners and you should get professional advice before taking the plunge.
When you have a company, that company is a “separate legal entity” in the eyes of the law. Unlike with your proprietorship, the company is treated like a separate person from you. For example, the company will pay its own corporate taxes, can be the registered owner of land, and can have its own bank account. Having your business’ assets and debts owned by a company can also provide you and your family protection if the company fails as your personal assets like your family home can remain protected from the company’s creditors.
To create a company in BC you have to incorporate with the BC Registry. The owners of a company are issued shares and become the shareholders of the company. There are many different kinds of shares and share structures, there is no one-size-fits all. At MJB we can answer your questions and work with your other advisors like your accountant to decide what’s best for your business. Depending on the type of business, your family, your other business partners, and your goals there are many other things to consider. Should your spouse be a shareholder? What about your kids? How can you transfer property to the company used in the business without tax consequences? What kind of paperwork needs to be filed going forward with the registry and when?
Incorporation is just the start of successful business. We can work with you going forward to make sure that your business has the best chance of succeeding and give you advice about how your day-to-day decisions affect your new company. We will discuss all of this with you and prepare the documents to give you peace of mind in knowing it’s been done right the first time.
As one of the largest law firms in the Interior, our lawyers have a broad range of specializations, ensuring that we have the experience to competently and professionally represent you.