CORPORATE LAW FIRM IN VAUGHAN ONTARIO

Sole Proprietorship

A sole proprietorship is the most cost-effective, least complicated, and quickest way to start a business. This is because it is owned and operated by one person, the sole proprietor, and the law treats the business and its owner as one entity. This is because there is no distinction between the owner of the business and the business itself. The sole proprietor can, and often will hire a few employees, but as long as the sole proprietor remains the only owner, the business is still considered a sole proprietorship.
There are many advantages to running your business as a sole proprietorship. These include minimal regulation from the government, complete control over the business, profits not having to be shared, and since a sole proprietor is only required to file one income tax return, s/he can remove any business losses or expenses from his/her personal income.
There are also disadvantages of sole proprietorship, the main one being the unlimited liability. This means that the owner of the business is personally liable for any of the business’ debts or obligations. In addition, if the sole proprietor passes away, the business is over. It may also be difficult to raise the money required to start your business on your own and if your business is successful, a sole proprietor may be taxed at a higher rate. Finally, since a sole proprietor is not considered an employee of their business, they will not be entitled to benefits like a salary or vacation pay.

Partnership

When two or more people conduct business together with the intention to make money, they are considered to be in a partnership. In similar fashion to a sole proprietorship, the partnership is not separated from the partners and each partner, together with the others, is therefore responsible for the debts and obligations of the business. Each partner will also pay tax at their own personal rate and have the ability able to deduct business losses from their personal income. Finally, any income generated by the business is considered to be income of the partners.

Types of Partnerships

General Partnership

  • This is the most common type of partnership. Every partner has an equal amount of power and liability unless there is a partnership agreement stating otherwise
  • Each partner has the duty to act honestly, in good faith, and in the best interest of the business.

Limited Partnership

  • Similar to a general partnership
  • Must consist of, at least, one general partner and one limited partner.
  • A limited partner may invest in and profit from the business, but may not be involved in any of the daily operations of the business. As well, since the limited partner is not a named partner, their liability is limited.

Limited Liability

  • Partnership for professionals only that limits personal liability
  • The firm name must contain “limited liability partnership” or “LLP” and be registered
  • Each partner is responsible for all partnership expenses and obligations
  • Each partner is responsible for their own negligence, therefore restricting the liability of the other partners
  • In an LLP you must have professional liability insurance
Our corporate lawyers in Toronto, ON can offer the following services to partnerships:
  1. Draft partnership agreements
  2. File business name registration

Corporation

  • The main purpose of an incorporated business is to protect the owner’s assets against the company’s liabilities.
  • It offers your company tremendous benefits, such as protection from creditors and tax advantages.
  • This document also details how you should plan to structure and run your corporation. This is how a business formally acknowledges that they intend to form a corporation. It also maintains the records required to conduct the affairs of an existing corporation, like drafting contracts and agreements.
  • It helps clients understand the advantages of establishing a business corporation as opposed to a partnership or sole proprietorship.
  • Incorporating a business shall abide by all the legal requirements pursuant to the Ontario Business Corporation Act (OBCA) or the Canada Business Corporation Act (CBCA) in its implementing rules.
  • Corporations are owned by their shareholders, but it is the directors that run it.

Types of Corporations

Not-for-profit Corporation: Corporations that are created for purposes other than making money, such as charitable, educational, or religious.
Business Corporation: Corporations that are created only to make money. They can be either private (no public shares) or public (shares traded on the stock market) Professional Corporation: A corporation exclusive to professionals
We can offer the following services to corporations:
  1. We will render services and information to our clients to better appraise the relevance of incorporation, their issues and concerns, and the legal rights of the corporations and its members.
  2. If a decision has been made to incorporate, we will provide you with the detailed format and procedures regarding incorporation and help you to determine whether to incorporate provincially, federally or both.
  3. We will also conduct a NUANS name search to ensure that your business name complies with all legal requirements. We will also manage the filing, registration, documentation, and other necessary legal requirements to properly incorporate your business provincially and/or federally.
  4. We will obtain any required Business licenses and permits necessary for you to carry on business.
  5. If required, we will also search for Articles of Revival
  6. We aid with the formulating of Articles of Incorporation that must specify basic details about your corporation, such as its name, principal office address, and sometimes the names of its directors.
  7. We create by-laws to establish the operating rules for your corporation.
  8. We assist in outlining the functions and roles of the corporation’s board members, officers, and members in order to establish a strong business organization.
  9. We help you draft a Shareholders’ Agreement, which is an agreement among a corporation’s shareholders, to outline how the company should be operated and the rights and obligations of shareholders.
  10. We help the Board of Directors draft board resolutions, written documents or statements, which record any decisions or action made by a Board of Directors during a board meeting.
  11. We also prepare and manage your minute book, which every corporation is required to keep by law so that you will never have to worry about losing your corporation
Example Board Resolutions: 
Other Business Structures
Only three business structures have been discussed above, but your business is not limited to just those. If a sole proprietorship, partnership, or corporation is not a viable option for your business, you may consider the following:
Joint Venture: a business where two or more parties, either individuals or businesses, decide to combine for a specific purpose.
Franchise: A contractual relationship between two parties: the franchisor, the owner of a business, and the franchise, someone carrying on the franchisor’s business at one or more locations.
Licence: Where the owner of an idea (licensor) grants another person (licensee) the right to use an idea, design, or formula

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