We are often consulted by people who want help setting up their business. There are number of basic options, which we go through below.
Sole Proprietorship
A sole proprietorship is one person carrying on business with no legal structure. Advantages to this are it is cheap and easy. Disadvantages are that business is mixed with personal. If there is liability (i.e. you get sued) you risk losing personal assets, however insurance can mitigate those risks. Expenses are personally deductible in this structure.
Partnership
A partnership is two or more people in a common business with a view to a profit. While there is no requirement to register a partnership, it is ideal to register and memorialize partner agreements. A simple partnership does not protect from liability, although a more complicated structure like a limited partnership or limited liability partnership might in certain cases.
Corporation
A corporation is a separate legal entity. It is owned by shareholders, and run by directors and officers. Corporations will often protect you from personal liability (although not always). These expenses are not deductible personally.
If you require advice on how to set up your corporation, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.
