Federal incorporation would give your business name protection and more rights along with it to support your business. This level would bring your business more global recognition. However, expect a lot more paperwork for mandatory corporate files and this type of incorporation would also cost higher fees. With provincial incorporation, your business is only entitled to operate in that particular jurisdiction and outside that border your business will have no name protection. If you plan on staying primarily in one province, this might be just enough for you. You can change your level of incorporation later if you like, but your business name might not be available.

The largest structure for your business is a corporation. It is owned by the shareholders who elects a board of directors to oversee and run it. Since a corporation is a legally independent entity, making its members not personally liable for the debt the corporation might carry. There are two major types of corporations: S corporation and C corporation.

This is the one of the most simple and flexible organizational structures you may consider for your business. This structure gets subjected to self-employment tax. Although there is flexibility to this structure, roles can be confusing if not confirmed. Make sure to prepare a LLC Operating Agreement to avoid this. This agreement also strengthen the LLC when a member leaves, otherwise the most LLCs would cease to exist with identity depending on the members. The Operating Agreement would also outline how your LLC would be treated for taxes. Compared to a sole proprietorship and a partnership, a LLC seems more advantageous although the costs are slightly higher. Like the name suggests, there is limited liability with no member being is personally liable for the company debts. An LLC would be a great option for your business from the easy setup to daily operations. Although your LLC would be simple enough for you manage on among the members, it is a good idea to keep in touch with an accountant or a lawyer.

Sole proprietorship is a very simple structure. If you are building your company as a sole proprietor, your company would be self owned with all debt responsibilities on you. Since there is unlimited liability, both your business and personal assets can be claimed to fulfill a debt. Due to this independent nature, raising capital will be a harder task.  On the other hand, you will have lower costs to this startup. You have more control over financial planning and decision making. And all of the profits belongs to you with many tax advantages. Most small businesses are structured as sole proprietorships for these ideal requirements and benefits.

Shareholders and the board of directors are two bodies that help govern a company. Directors are appointed by the shareholders to manage the company. Directors might be delegated with certain powers. They take part in board meetings to make the important decisions for strategic and operational concerns of the business.

There are two types of corporations: C corporations and S corporations. An C corporation is the more common type between the two. It may have unlimited owners to help raise capital. This type of corporation can be subjected to corporate tax rates. Among the two, this is a great choice for start-up businesses, if you plan on bringing in more venture funds, grant equity to employees and plan on going public or being acquired by another. An S corporation runs a little differently. While the corporation might file a tax return, the company will report the gains and the profits on the personal taxes to avoid double taxation. Both S and C corporations have limited liability.

Both an LLP and LLC has limited liabilities. Unlike an LLC, an LLP must have more than one owner. However, none of the LLP owners need to be a general partner. If you are part of a professional group, such as lawyers or accountants, an LLP is a great fit for your business structure. An LLC combines the tax benefits of a sole proprietorship with the limited liability of a corporation.

Like the term suggests, this structure allows two or more people to come together to share resources to make a profitable business. The partnership would leave all members sharing the responsibilities including debt. Since all members can legally bind each other without approval, there is a few things to remember. Make sure your business partner is the ideal one for the job to reduce a chance of conflict rising.  There are great benefits in a partnership. Much like a sole proprietorship, a partnership is easy to create with lower costs to launch the business. There is a larger management structure to share responsibilities and support the business with, although it means sharing authority. There is more sources of capital and there may even be some tax advantages.  Partnership is another great option for the structure of your business. Make sure to draw up a partnership agreement with terms and conditions to protect yourself in case of future disputes or a dissolution.

Your corporate lawyer is more adept compared to a web service, they can paying attention to what your business need in great detail. Your lawyer can provide you with professional advice, help negotiate during transactions, and analyze benefits and risks in proposals. Especially when dealing with a large sum of money for contract or a very important project, hiring a corporate lawyer is your safest choice for the future of your business.