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| Corporations |
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There are three basic structures any business
can take:
There are many legal differences between sole proprietors,
partnerships, and corporations (a few of these differences are listed below). It is
advisable that you consult with a lawyer to determine which type of business structure is
best for you. Corporations Branch does not give this type of advice.
- A sole proprietorship
is a business consisting of one owner. That owner may be either an individual or a
corporation. If the owner is an individual (who is also personally liable for all the
debts of the business) and carries on business under a name other than his or her personal
name, that name must be registered under The Business Names Registration Act.
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- A partnership is
a business owned by one or more individuals or corporations (in any combination). Within a
partnership, each partner is potentially liable for all debts of the partnership. If the
partnership carries on business under a name, that name must be registered under The
Business Names Registration Act.
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- A corporation is
a legal entity that has a separate legal existence apart from its shareholders and
directors. It is sometimes also referred to as a ‘limited company’. Since it has
a separate legal existence from its shareholders and directors, they are generally not
personally liable for the debts of the corporation beyond the amount contributed. Although
it is the shareholders which ‘own’ a corporation, it is the directors who manage
the day-to-day operations.
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