A sole proprietorship is the simplest form of business organization and involves one person performing all of the functions and assuming all of the liabilities arising from the business and its activities. In some ways, this form can be cheaper, faster, and easier to set up than an incorporated company.
When a company is incorporated, it acquires all of the powers of an individual – it can secure assets, accrue debt, enter into contracts, and sue or be sued. This has the effect of shielding your personal assets from lawsuits and creditors, and can even minimize the amount of taxes you have to pay each year. An experienced corporate lawyer will be able to expand on these advantages, and advise you as to which option will be best for you.
In BC, it is possible for you to operate as both an incorporated or unincorporated business. The decision to incorporate will depend on the specific needs of the business and those involved, and consulting with a lawyer who will help you to decide which option is best for you.
If you choose to incorporate a numbered company, the government will assign a number upon request at the time of filing for incorporation. This number, followed by BC Ltd., will be your corporation’s name. The decision to incorporate a numbered corporation will save you a bit of time and money, and is most often chosen for companies that will not be dealing with the public. This is simply because companies that deal with the public generally opt for names that customers will be drawn to and remember. Ask your lawyer whether a numbered company or named corporation will be better for you.
The cost of incorporation generally costs $1350, all in. Your lawyer can properly compile your articles, execute an accurate name search, file the incorporation application, create and even store your corporate minute book, and continually file the necessary annual reports. Although you may not need a lawyer to incorporate, shortcuts often lead to mistakes that end up costing you more to fix later. At the very least, you should consult with a lawyer to better understand the risks of doing it yourself.
Incorporating a numbered company can take as little as a few hours. Incorporating a named company takes longer, as the process of searching and reserving a name can take approximately 48 hours.