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Summary Of Kelly Santini Llp's Legal Considerations When Starting A Business

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Kelly Santini LLP’s webinar, Legal Considerations When Starting a Business, discusses three major forms of business entities: sole proprietorships, partnerships, and corporations.

Sole Proprietorship

A sole proprietorship is an unincorporated business run by a single individual with a view to profit. There is no legal distinction between an owner of a sole proprietorship and the business. While the business can have employees, the owner cannot be an employee, nor can he or she have any partners. If the business will be a name other than the legal name of the business owner, the owner will need to register the business name under the Business Names Act and obtain a Master Business Licence. This licence must be renewed every five years. In …show more content…

A partnership does not have to be in writing for a general partnership, although a Partnership Agreement is recommended. Partners are the owners of the firm; however, the business is not a separate legal entity. If the name of the business is anything other than the legal names of the partners, then just like the sole proprietorship, the name must be registered under the Business Names Act and they must obtain a Master Business Licence, to be renewed every five years. There is no business tax rate; income flows to the individual partners and each partner pays a personal tax rate. Partners are agents of one another and have a duty of loyalty and good faith to each other. In addition, they are jointly and severally liable, meaning they are liable for the debts of the partnership.
A limited partnership has at least one general partner, who has unlimited liability, and one limited partner, whose liability is limited to the amount of capital the limited partner invested in the business. The limited partner, also known as a silent partner, shares in profits on a proportionate basis, but they are unable to take part in the management of the business. Unlike a general partnership, a limited partnership requires a partnership …show more content…

The owners are shareholders, who own shares, not the property of the corporation. A corporation can be incorporated either Federally or Provincially and the corporation can either register a name, after performing a Nuans Corporate Name search (to avoid choosing a name that is already taken) or take the assigned number upon incorporation. Performing a Nuans search is slightly lengthier and expensive process; however, provides more identity than a number

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