Structuring Your Alberta Based Business
A business is any venture that makes, or tries to make money. A business can supply either goods or services for a fee or price. There a several business structures that can be used when starting a business in Alberta. Using the right business structure saves you money and liability. As such, planning ahead it an important aspect of starting any new business. Most important, the business start up lawyers at Kahane Law Office in Calgary, Alberta can help you determine the best business structure for your new venture. Call today for any help you need 403-225-8810.
What Are The different Main Forms Of Business Structure?
There are several forms of business structure in Alberta. The most common choices are a business structure as a sole proprietor or a business structure as a corporation. Only a corporation creates a legal entity recognized in law. The following explains some of the options when it comes to starting a new business venture.
Brief Description Of Business Structures
When people decide to start a new business venture, they need to pick the most appropriate business structure to meet their needs. What a specifics client’s needs include, vary from person to person and business to business. For some, the key aspect is liability protection. For others the for a business takes involves tax savings. Still for others, the key factor involves whom owns the business and which ownership groups operate them. Mostly, client’s base their dicision on a combination of all these factors. In terms of options, for example, the following are types way to structuring your business in Alberta together with a brief description.
Corporations exists as legal entities created under Alberta (or federal) law. Corporation created outside of Alberta are not recognized and are not a legal entity unless they are extra-provincially registered in Alberta. As a legal entity, a corporation gives tax and liability protection to its shareholders. There are many advantages to running a business in a corporate business structure.
Secondly, a sole proprietor is a business structure that really has no structure. If an individual starts a business, the individual is the business. He or she attracts taxes and liabilities in their personal name. Everything remains operated, held and earned as an individual. In some ways, it is a way of structuring a business without anything formal in an of itself. This way of running a business offers the least amount of tax and liability protection to the business operator.
Thirdly, a partnership is a business structure whereby a number of individuals and/or companies start a business as a group. The partnership is not a legal entity on its own. Rights, responsibilities, liability and entitlements are decided by contact. It is very important for all partnerships to have a partnership agreement in place to avoid issues between the partners.
Next, a joint venture business structure is when one or more individuals and/or corporations get together for a specific business venture. Where a partnership involves the starting or running of a business, a joint venture is only focused on the one venture. Similarly, a joint venture agreement is the basis of rights, responsibilities and liabilities between the joint venture partners as a joint venture is not a legal entity on its own.
Conversely, a subsidiary is simply a smaller division or aspect of one of the above business structures. Most often a parent company company holds ownership to the subsidiary company. As a general rule, the subsidiary operates a different business as the parent company. In other circumstances, the subsidiary functions as a mechanism to reduce liability of a parent company and protect assets of the parent company.
This mechanism for structuring a business relationship involves no separate legal entitle. While a joint venture and partnership are both contractual relationships, there are other business that stem from a contractual relationship other than these two. Often two differing business plan to operate a business, project or venture together, but not in a formal legal entity. The complete their project as a contractual dealing.
Finally, branches represent a single business entity. They do not exist as a stepparent for of organizing a business. Instead, they include different outlets of a business organization. They represent different locations for the same company and fall under the main company’s business structure.
How To Pick The Best Business Structure
Determining the best structure for you will depend on the nature of your business and how you plan to run it. It is a very good idea to consult with a entrepreneurial lawyer or business start up lawyer to make this determination. Using a structure that is not appropriate can cost you money, and create personal liability that could otherwise be avoided.
Finding The Help You Need
The business structure lawyers at Kahane Law Office are here to help. With an office in central Calgary, Alberta, we can act for you from just an initial consultation to a full incorporation. We can also draft any agreements required for your particular business. Lastly, always ensure that you organize your business correctly form the start. This saves you time and money. Call today. We can be reached at 403-225-8810 locally in Calgary, Alberta or toll-free at 1-877-225-8817 or email us directly here.