Website icon: www. Incorporate now. This is important if you expand your business to multiple provinces or territories and want to use the same name. Your official business address can be anywhere in Canada, and you can hold annual meetings digitally and anywhere in the world. Corporations can borrow money at lower rates. They can also raise money by selling shares or bonds to investors called shareholders. Corporate tax rates are generally lower than personal income tax rates. Shareholders are not responsible for a corporation's debts.
If your corporation goes bankrupt, your shareholders only lose up to what they invested. Corporations have the same rights as a real person, including owning property, getting loans, and entering into contracts.
Corporations live on until they wind up, amalgamate, or give up their charter for example, when they go bankrupt. With other business structures, a business stops existing when the owner dies. Incorporating your business creates a new legal entity, called a corporation. Transcription — Federal incorporation [A woman business owner is standing in her pho enterprise, with a man and child at her side.
Key: More than 40, new incorporations per year Simple, fast, painless] Narrator: We are Corporations Canada, and we help over 40, businesses become federally incorporated every year, making the process simple… fast… and painless. Key: Operate under one unique name nationally] Narrator: So why incorporate with Corporations Canada? Key: Lower tax rates] Narrator: You'll most likely lower your tax rate. Raising capital is generally easier for a corporation, since a corporation can issue shares of stock.
This may make it easier for your business to grow and develop. In most cases, banks would rather lend money to corporations than to unincorporated business ventures. Corporations generally have access to more alternative sources of capital through which they can pay off their debts. The benefits of incorporating go beyond finances. Suppliers, customers and business associates often perceive corporations as being more stable than unincorporated businesses.
Corporations are the most enduring legal business structure. A corporation can continue indefinitely, regardless of what happens to its individual directors, officers, managers, or shareholders. This means that by incorporating your business, you may be able to avoid the legal entanglements that could result with other business structures. A corporation can offer anonymity to its owners. If you don't, a court can pierce the corporate veil and hold you and the other owners personally liable for the business's debts.
It is important to follow all the rules required by state law. You should keep accurate financial records for the corporation, showing a separation between the corporation's income and expenses and that of the owners'. The corporation should also issue stock, file annual reports and hold yearly meetings to elect officers and directors, even if they're the same people as the shareholders. Be sure to keep minutes of these meetings.
On all references to your business, make certain to identify it as a corporation, using Inc. You also want to make sure that whomever you deal with, such as your banker or clients, knows that you are an officer of a corporation. Jerry Reid. Entrepreneur Staff. Anna Johansson. Sally French. Benjamin Rains. Sweta Jaiswal, FRM.
Skip to content Profile Avatar. Subscribe to Entrepreneur. Magazine Subscriptions. Opinions expressed by Entrepreneur contributors are their own. By filing this application, the incorporator will put on record facts, such as: the purpose of the intended corporation, the names and addresses of the incorporators, the amount and types of capital stock the corporation will be authorized to issue, and the rights and privileges of the holders of each class of stock.
More About Starting a Business. Jerry Reid Nov 12, Entrepreneur Staff Nov 11, Starting a Business. Anna Johansson Nov 11, Latest on Entrepreneur.
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