Partnerships and Business Names - Frequently
Asked Questions
What is a Business Name used for?
A sole proprietorship is a business, which is
owned by one person who is solely responsible for
its management and capital.
Do I have to register my Business Name?
Yes, this is necessary if you:
- Carry on business under a name other than your
own. (example: ABC Plumbing)
- Use your surname in the name of the business, but
the name indicates more than one person is involved.
(example: Smith & Associates Plumbing)
What are the
advantages of operating under a Business Name?
- It is easy to start up and manage.
- It is not as costly as incorporation.
- In the initial years of operation, there may be tax
advantages operating as a sole proprietor until the
operation becomes profitable. Once profitability is established, the
operation could be converted to a corporation.
Specific advice should be obtained from an accountant
or lawyer.
What are the disadvantages of operating under a
Business Name?
- The owner is personally liable for all business
debts. Creditors may be able to recover against the
owner’s personal assets (e.g. home, car) to satisfy
business debts.
- The sole proprietorship is not taxed separately. The
proprietor’s business income is taxed as part of
personal income.
- If the owner passes away, the business becomes part
of his or her estate, and there may be immediate tax
consequences.
Once my business name is registered, am I registered
across Canada?
No, your business name is registered only in the
Northwest Territories. If you are interested in doing
business in other jurisdictions, contact our office
for the addresses and phone numbers of the Companies
Offices in those jurisdictions.
What is a Partnership?
A business enterprise which exists between two or more
persons carrying on business in common, intending to
make a profit.
What are the advantages of operating under a
partnership?
- The partners can combine their financial resources
and skills.
- Registration is not as costly as incorporation.
What are the disadvantages of operating under a
partnership?
- Each partner is liable for all the debts and
obligations incurred by the other partners in the
course of the partnership business.
- Each individual partner is liable both on his own,
and with the other partners, for any wrongful acts or
omissions by another partner in the course of the
partnership business.
- The partnership is not taxed as a separate entity.
Each partner’s share of the business income is taxed
as part of that partner’s personal income.
- In the absence of a partnership agreement,
when a partner leaves or dies, or when there is a
dispute that cannot be resolved, the partnership must be
dissolved.
Once my business name or partnership is registered,
how often must I renew the registration?
Your business name or partnership remains registered
until cancelled or dissolved by you.
Any amendments to your registration must be filed as
outlined under the document
Guidelines for Amending Business Name & Partnership
Registrations.
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