Should I Incorporate a Company?
You have the idea for a new business. You’ve been researching, planning and gathering information, checking locations, talking to your bank manager and possibly an account. Where do you go from here?
Starting a new business is exciting, without question. Part of your planning should involve looking at the legal structure for your venture. What are your plans? Is the business something you want to hand down to your children? Will it involve others? Are there investors? What about employees? Many businesses are run online these days and most have some online component – are you ready for that?
There are a lot of questions to consider. Good experienced legal advice can help you make a plan, anticipate future requirements, look at any potential downsides you may not be aware of and prepare for getting the business up and running.
Many, if not most, new businesses start out as sole proprietorships, that is, owned and run by one individual or a married couple, and in which there is no legal distinction between the owner and the business. An informal partnership is in effect quite similar (see our article on Partnerships.)
Incorporating a business, however, is a different animal. This means creating a formal legal entity – in law called a statutory person – to conduct business.
The law sets out various kinds of “persons” . There are the flesh and blood type (you and I) and there are the statutory type known as Creatures of Statute, such as societies, foundations, government agencies of all kinds and companies or corporations.
British Columbia Company or Corporation
These are created by Statute or a law enacted by the legislature (in BC companies or “incorporations” are created by the Business Corporations Act of BC). These artificial legal “persons” are business organizations through which goods and services can be bought or sold, products can be manufactured and other business or commercial activities conducted.
B.C. Society or Association
These “legal creatures” must be properly and expertly created and maintained through legal processes by lawyers acting in the best interests of the client.
Incorporating a Canadian Company or Corporation
For some businesses doing business nationwide or involved in certain business activities which fall under federal jurisdiction, it may be advisable to incorporate under federal laws.
If we can assist with setting up your new company or if you have questions regarding a BC incorporation, contact us using the form at the right of this page.
Keeping Your Company in “Good Standing”
You’ve finished incorporating your new company. Congratulations! Now all you need to do is get out there and do business, building your company into the success you know it can be.
Hold on a second! Just like a human person, statutory persons – that is, companies – require ongoing care and attention. And just like the human counterpart, ignoring this can have dire consequences.