Before you can start with your business operation, you have to ensure that it is registered. Applications must be filled out and depending on the type of industry you like to be in, you’ll need to have permits and licenses too.
Before you start investing your money on a business, it is crucial to know the legal business structure that’s suitable to your enterprise. Basically, this is a decision that you must not take for granted as the decision you make is going to affect your taxation levels, liabilities, ownership status, succession, disposal of your company if you have decided to sell it in the future and other legal matters.
If you’re living in Ontario for example, you will notice in your research that Sole Proprietorship, Partnership and Company are the most common business structures being applied for.
Number 1. Sole proprietorship – this is a kind of business structure that has one person carrying all the company’s trading responsibilities.
Number 2. Partnership – if you are in a partnership structure for example, then all the liabilities, profits, losses, risks and responsibilities are shared between or among your partners.
Number 3. Company – this is more of a regulated legal entity that’s separated from its shareholders and officers. Handful of the usual types of this structure are proprietary and public companies.
Prior to processing the business registration, it is integral to take a look at the possible benefits and drawbacks as well of every given structure and then, choose one that will bring the most positive impact to your trade. To ensure that you are making the right choice, it will be wise to ask yourself questions like what kind of business you wish to run, are you capable of handling responsibilities alone or would it be smart to share these obligations with a partner, what’s the kind of profit margin and income you deem acceptable, in what way profits will affect your taxes and personal income and so forth.
After you are done choosing the structure for the business, that is the only time where you can move on to the next step of business registration and it is about thinking of what name is appropriate for the industry your business is in. Picking a name that sounds simple is enough but don’t forget that your choice of name should be accepted legally in the country or state you are in. No companies must carry the same name and in the event that your suggestion is listed already, then you better think of a different name.
For first time entrepreneurs, being able to handle business registration on top of hiring employees, leasing building, dealing with legal affairs and everything in between might be too overwhelming. Fortunately, this can be done a lot easier by hiring corporate service agency to help.