As a business owner, one of the most important decisions you’ll make is how to structure your company. There are several options available in Ontario, each with its own benefits and drawbacks. In this blog, we’ll discuss the various corporate structuring options available in Ontario and how an Ontario corporate structuring lawyer can help you make the right choice for your business.
The most common forms of business structures in Ontario are sole proprietorships, partnerships, corporations, and limited liability partnerships. Each structure has different legal and tax implications, and it’s essential to choose the one that best suits your business needs.
Sole Proprietorships:
A sole proprietorship is the simplest form of business structure, with the owner being the sole proprietor. In this structure, the business and the owner are considered the same entity, and the owner is personally liable for all the business’s debts and obligations. A sole proprietorship is easy to set up and operate, but it may not be the best option for a business that requires significant investment or has a high risk of liability.
Partnerships:
A partnership is a business structure where two or more individuals share the profits and liabilities of the business. In a general partnership, each partner is responsible for the business’s debts and obligations, and profits are split equally or as agreed upon in the partnership agreement. In a limited partnership, there is at least one general partner who is responsible for the business’s debts and obligations, while the limited partners have limited liability and share in the profits. Partnerships are flexible, easy to set up, and often have lower start-up costs than corporations.
Corporations:
A corporation is a separate legal entity from its owners, with its own legal rights and responsibilities. Corporations provide limited liability protection for their owners, meaning the owners are not personally liable for the business’s debts and obligations. Corporations can issue stocks, which allows for easier access to funding, and often have lower tax rates than other business structures. Corporations can be either public or private, and each has different legal and regulatory requirements.
Limited Liability Partnerships:
A limited liability partnership (LLP) is a hybrid between a partnership and a corporation, providing both the flexibility of a partnership and the limited liability protection of a corporation. In an LLP, each partner is only responsible for their own actions and is not personally liable for the actions of other partners. LLPs are often used in professional service industries, such as law or accounting.
An Ontario corporate structuring lawyer can help you determine the best structure for your business based on your goals and objectives. They can also assist you in preparing the necessary documents, such as partnership agreements or articles of incorporation, and ensure that your business complies with all relevant laws and regulations.
In summary, choosing the right business structure is crucial for your business’s success, and there are several options available in Ontario. Each structure has its benefits and drawbacks, and it’s essential to choose the one that aligns with your business goals and objectives. An Ontario corporate structuring lawyer can help guide you through the process and ensure that your business is set up for success. Contact Falcon Law PC at 1-877-892-7778 or info@falconlawyers.ca to schedule a consultation with one of our experienced lawyers.
