Organize Your Business Select the organizational structure for your business Sole Proprietorship...

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EP2150 – Entrepreneurship Legal Issues for the Small Business

Transcript of Organize Your Business Select the organizational structure for your business Sole Proprietorship...

Page 1: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

EP2150 – EntrepreneurshipLegal Issues for the Small Business

Page 2: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Organize Your BusinessSelect the organizational structure for your business

SoleProprietorship

Partnership Corporation

Select andregister a business name

Select and register apartnership name

Select a corporatename

Draw up apartnershipagreement

Draw uparticles ofincorporation

File for incorporationwith provincial orfederal government

Comply with provincial licensingrequirements

Comply withmunicipal licensingrequirements

Deal withmandatorydeductions

Consideremployment standards

Page 3: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Forms of Business OrganizationSole Proprietorship

AdvantagesSimple and

inexpensive to startIndividual control

over operationsAll profit to the

ownerLosses deductible

from any other income

DisadvantagesUnlimited liabilityMore difficult to

obtain financingLimited resources

and opportunity

Page 4: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Forms of Business OrganizationPartnership

AdvantagesPooling of financial

resources and talentsSimplicity and ease

of organizationIncreased ability to

obtain capitalPotential for growth

DisadvantagesUnlimited liabilityDivided authority

Page 5: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Forms of Business OrganizationLimited Partnership

AdvantagesLimited liability for

limited partners

DisadvantagesCentralized

managementDifficulty in changing

ownership

Page 6: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Forms of Business OrganizationCorporation

AdvantagesLimited liabilityContinuity of the

businessEasier to raise

capitalPotential employee

benefitsTax advantages

DisadvantagesCostLegal formalitiesInability to flow

losses through to the shareholders

Need for personal guarantees

Page 7: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Forms of Business OrganizationCo-operative

AdvantagesOwned and

Controlled by members

One member – one vote

Limited liabilityAny earnings surplus

is distributed to the members

DisadvantagesLong decision

making processPossibility of conflict

among membersLess incentive to

invest capitalExtensive record

keeping required

Page 8: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Other Legal Requirements

Licences and PermitsMunicipalProvincialLand Use and Zoning

Mandatory Deductions Income TaxEmployment InsuranceCanada Pension Plan

TaxesProvincial Sales TaxGST/HST

Employment Standards

Insurance

Page 9: Organize Your Business Select the organizational structure for your business Sole Proprietorship PartnershipCorporation Select and register a business.

Types of Insurance

1. General Liability Insurance2. Business Premises Insurance3. Business Use Vehicle Insurance4. Business Interruption or Loss-of-Income

Insurance

5. Disability or Accident and Sickness Insurance 6. Key Person Insurance7. Credit Insurance8. Surety and Fidelity Bonds9. Partnership Insurance10. Workers’ Compensation