Vernon Business Lawyers Assisting with Incorporation & Business Structures
Starting, growing or incorporating a business can be extremely rewarding, but it also comes with a number of challenges, and all options should be considered carefully in order to maximize benefits and minimize financial risk. Every step of planning a business is a critical one, which comes with its own set of legal and business repercussions from ownership to liability to tax implications. Properly planning for these issues often starts with determining how your business will be structured.
The corporate lawyers at Cherkowski Marsden LLP in Vernon, have over 50 years of combined experience helping clients structure their businesses and/or incorporate new or existing companies. We will thoroughly examine your options and help you determine the most advantageous business structure for your needs. We want to ensure that we come up with a strategy that best serves to minimize your costs and afford you protection. We work with small, family-owned businesses as well as multinational corporations, and our experience and expertise are similarly varied. As a result, we are perfectly positioned to advise you as your business grows, keeping you informed of potential pitfalls and opportunities along the way. We will put together a proactive plan that best suits your current needs and can grow and change along with your business over time.
Business Structures 101: The Pros and Cons
There are many variables to consider when choosing a structure for a new or existing business, each with its own set of benefits and disadvantages to consider, such as:
- Decision-making ability;
- Tax implications;
- Personal liability;
- Start-up costs;
- Regulatory considerations;
- Ease of transfer; and
- Business succession planning.
We are well-versed in the various structures and can help you choose the most expedient option for your company. Some of the most common business structures include:
Businesses with a sole owner.
|Simple and low cost in terms of set-up with minimal regulatory requirements, and the owner retains full decision-making ability. The owner can also take advantage of considerable business-related tax deductions.
|The owner is fully liable for the debts and obligations of the business, and so a creditor can make a claim against the owner’s personal assets as well.
A non-incorporated business created by two or more people with equal ownership.
|Simple and low-cost to establish, partners share equally in profits and management. As with sole proprietorships, the partners can take advantage of significant tax deductions.
|Unlimited personal liability for each partner, as with sole proprietorships, and each partner is liable for decisions made by their partners.
A non-incorporated business overseen by one general partner and supported by limited partners.
|The general partner retains decision-making ability, and a bigger share of profits. The limited partners have limited liability, capped by the portion of capital they’ve contributed to the business.
|The general partner also takes on the highest risks in terms of liability, as they are the only partner that is also personally liable. The limited partners do not have a say in business decisions.
Differs from partnership in that separate business entities come together to share resources but maintain separate business identities. Each member of the venture shares only in the costs related to the specific venture. You can have a sole proprietorship that is part of a joint venture.
|Allows businesses to partake in resources that may otherwise be too costly. For example, farm owners may start a joint venture to share expensive equipment that they each only need some of the time, with each person maintaining their own separate business.
|Differing management styles among the participants can cause conflict, all parties may be negatively affected by the decisions of one (for example, careless use of expensive equipment that results in costly damage).
The creation of a unique legal entity separate from the individual shareholders, which can be established at the provincial or federal level.
|Shareholders are not personally liable for the actions, debts or responsibilities of the business. Further, a corporation can be transferred easily and can continue to exist in the absence of those who created it. There can also be significant tax benefits.||Costly to establish and very closely regulated. Significant record-keeping is required including annual reports that must be filed with the government.
We will go through all options with you, helping you to determine the one that provides you with the most benefit and the least amount of risk. Our highly experienced business lawyers will set you and your business up for success. We know the legal challenges businesses can face, and we guide our clients to proactively and strategically address these challenges from the company’s inception.
Our clients know that we are always looking ahead and pointing out when changes should be considered as their company evolves, and they appreciate building a working relationship with us they can rely on long term.
Vernon Business Lawyers Providing Sound Advice and Experience to Companies of all Sizes
At Cherkowski Marsden LLP we work with business professionals at all levels and across a wide range of industries. We advise our clients on the advantages and disadvantages surrounding incorporation, joint ventures, partnerships, limited partnerships, and sole proprietorship. Our work doesn’t end once your business organization is in place; we will also work with you on business maintenance and will continue to highlight beneficial changes as the business evolves. If you are looking to establish, evolve or grow your business, contact us online or at 250-308-0338 to take advantage of our experienced and knowledgeable advice.