How to legally run a business in Canada? Do I need to register my business in Canada?
The answer is of course. Generally speaking, there are three types of businesses you can choose to register: sole proprietorship, partnership, and corporation.
For new immigrants or international students who have just graduated and want to start their own business, choosing the right type of business is indeed a troublesome matter. The following editor will help you answer in detail.
What is a Sole Proprietorship?
A sole proprietorship, also known as self-employment, is a business that is owned and controlled by an individual and in which the individual bears all operating risks and enjoys all operating profits.
Introduction : A sole proprietorship is also called self-employment, which means that a person invests in a business, owns and controls the business, and bears the operating risks and enjoys all the operating profits. It is a non-registered company entity. In Canada, it is mainly popular in small business activities such as real estate brokerage, purchasing for overseas students, home kitchens, personal consulting, etc.
advantage :
- The procedures for establishing and dissolving a company are simple.
- The business management is flexible and free, and the business owners can manage the business completely according to their own wishes.
shortcoming :
- The risk is huge. When the business is not doing well and debts need to be repaid, the business owner will be held unlimitedly liable for the business debts, which means that the business owner must use his personal property to pay off the business debts.
- The future development scale of the enterprise is limited. It is difficult for the enterprise to obtain external investment, and the limited time, property and energy of the business owner restrict the development and growth of the sole proprietorship.
What is a Partnership?
A partnership is a business established by two or more partners who invest together and operate the business together.- A joint venture does not need to pay income tax in the name of the enterprise, and all income is taxed in the name of the individual.
- With simpler regulatory laws and regulations, partnerships are easy to establish and dissolve.
- Compared with sole proprietorship, joint venture has better development prospects. Joint venture is jointly funded and managed by the joint venturers, with relatively strong capital chain and easier access to external investment.
shortcoming :
- Liability is unlimited, and general partners are required to repay business debts from their personal finances.
What is a company?
A company refers to an enterprise legal person established in accordance with the law, with independent corporate property and for the purpose of making profits.
- Limited liability. Shareholders are liable for the company's debts only to the extent of their capital contributions.
- Convenient fund-raising. The company can raise funds by issuing stocks and bonds, which greatly expands the source of funds for the enterprise, enables the scale of the enterprise to break through the capital limit, and has an optimistic future development prospect.
- Long-term development. Standardized company system and internal management, abundant sources of funds and human resources are the strong backing for the company's future development.
- The procedures for establishing and dissolving a company are complex.
- Strict government supervision and laws and regulations need to be followed.
- Complex accounting standards and tax regulations need to be followed.
Now that you know the basic types, do you think it is not easy to do business in Canada? Is it more difficult to choose? It doesn't matter. Wang Ke CPAs will tailor the most suitable type of business for you. From choosing the type of company, registering the company, to issuing financial statements, we provide the most comprehensive services. There is nothing we can't do, only what you can't think of.
