A business may, in many cases, represent the asset of the most value that one may build up in her or his lifetime. It represents a large investment of time, effort and capital on the part of the owner and, frequently, the family members as well. Consequently, when considering a buying or selling a business, serious thought must be given as to the best means of doing so.
A number of issues must be taken into consideration in deciding what course of action to follow. Some of the more important ones include:
An experienced lawyer can provide valuable advice throughout the process. Engaging the services at an early stage in the process will allow you to make good decisions from the outset. We have over 25 years of advising clients and would be pleased to discuss the issues with you.
The first step in starting a business is to establish what form it will take: Sole Proprietorship, Partnership or Corporation.
There are advantages and disadvantages to each, from a tax and legal liability standpoint. The sole proprietorship is the simplest, but also makes you personally liable for debts and claims against the business, putting your personal assets at risk.
Partnerships are effective ways to structure businesses where more than one person wants some control over management and day-to-day operations. The personal assets of the partners are still available to satisfy the claims of creditors if the business assets are not sufficient to do so.
An incorporated company usually enjoys the best tax advantage, while protecting its shareholders from personal liability on claims against the company.
There are advantages and disadvantages to each form or operating that a business lawyer can explain in detail. After determining which structure is best for you, you will need to decide on a business name. Your lawyer can perform a business name search, determine whether your choice is available or already taken, and then register the business with the province.
It is also necessary to obtain a business number for the purposes of collecting H.S.T. and remitting income tax and other monies owing the government. Depending on your business, it may also be necessary to obtain a Vendor’s permit. Business licenses and other operating permits may be required by your local municipality as well.
Other issues, such as the establishment of a business bank account, lines of credit and leasing of business premises can be reviewed with your lawyer. If you will have employees, you will need to set up a payroll system and deal with such issues as payments for workers' compensation, employment insurance, income tax and benefits.
Business and Liability Insurance is a good idea even if you are not legally required to have these. This can protect you from any claims that may arise against the business. Starting your own business is exciting. Good organization, planning and experienced professional advice are the key to a successful start-up.