CORPORATIONS
Every incorporated business
must have a name that legally identifies it.
Published by Zoom Startups
November 10th, 2021.
A corporation is a legally established business
that can own assets and incur debt. In Canada, a corporation is created when
one or more entrepreneur register a business with a provincial or federal
government through articles of incorporation by documents that describe the
type of business being created, its officers, directors and bylaws. This process can be complex and
should be done with the advice of a professional.
In order to have your business registered as a
corporation our
qualified business expert can assist you with the following steps.
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Step 1: Naming your corporation
which can be made up with numbers or words.
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Step 2: Creating your articles of
incorporation which establishes the structure of your corporation.
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Step 3: Establishing the initial
registered office address and first board of directors. Every incorporated business
must have a registered office address and a board of directors. The registered
office is where your corporate records must be kept. This is also the address
official documents will be served on the corporation. This includes any postal
mail, parcels and legal documents.
Your corporation must be have a board of
directors. These directors must meet the
eligibility criteria. When you incorporate your business each director's first
name, last name, address, whether or not they are a resident Canadian must be
disclosed.
Corporations are considered legally separate from
their owners. Because it is defined by law, a corporation is an impersonal
entity. If the owner dies, the company can continue without issue—unlike in
partnerships or sole proprietorships where company assets can be tied up
because of estate or taxation issues.
Operations
of corporations are usually by multiple owners whose ownership percentage is
determined by how many shares they hold. There is usually structure and formality
in a publicly traded corporation, along with high administration costs. They
share decision-making under the guidance of a board which sometimes can hamper
flexibility but it encourages accountability. At Zoom Startups our qualified professional can offer
advice on constructing articles of incorporation and bylaws
for your business.
In most corporations
revenues, expenses and cash flow management are all traced internally by
professionals, with
additional professional support like
auditors from outside if necessary. With regard to publicly traded corporations,
they must report their results publicly through audited financial statements
and detailed disclosures.
One
advantage of corporations is that they have few limits on the expenses they can
deduct for taxation purposes. They pay tax on earnings before tax at
established rates. Net income that is distributed to owners is then taxed again
at their personal rates. They are subject to progressive tax rates established
by federal, provincial and municipal authorities.
Let our
certified experts do all the paper work regarding your tax breaks, benefits and
liabilities. Limited liability is an advantage.
If the company is sued, the owners’ personal assets cannot be seized to settle
the claims. Owners’ liability is limited to their investment. Capital can be
raised without exposing owners to unlimited liability.
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