Business Structure

If you are contemplating starting a business, the first question you should ask yourself is “What business structure should I adopt?”.

Individuals starting a business on their own have the option to operate as a sole proprietor or incorporate a separate company and run the business through the corporation. Multiple individuals who are thinking about getting into business together have the option of entering into a partnership agreement or incorporating and entering into a shareholder’s agreement.

Determining which business structure is the best for you, should be dependent upon the following factors:

i) personal liability (what happens if you or your company gets sued?);

ii) tax liability (what is the best method for minimizing the overall taxes you pay?); and

iii) the process for exiting or winding up the business (what happens if you want to exit the business?).