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Whether you have a restaurant or you run an auto repair shop, you are faced with the same question when you start your business. Should you open a sole proprietorship, a partnership, or a corporation? This question is one of the first ones that any business owner needs to consider. It’s answer that will determine the actions of every person involved from then on.
Things to Consider
So, what are the things you need to consider before deciding to open your first business? First, you might want to ask yourself just how much work are you willing to do? Having a corporation adds to your workload and the added work does not always have to do with running your business.
You will be required to write quarterly and annual reports, submit corporate returns and follow a lot of additional rules that you may not have considered. If accounting is not a strong suit of yours you may need to invest additional funds to hire an accountant and other staff members to help you to keep up with the added workload.
Consider, also that setting up your business as a corporation will cost much more. Once set up, the ongoing expenses incurred for the administration and management of the business will also be higher. You may also need to hire a lawyer to make sure that you are compliant in regards to licenses and tax returns among other things specific to your business.
The Bottom Line
When you are thinking about whether you want to incorporate in Canada, your mind tends to fall upon the many legal and tax advantages to be had. However, you also need to think about how the decision will impact on important aspects of your business. Is your revenue enough to support the added expenses? Will the increased workload impact your personal life? And are the advantages to be gained balanced with the growth or potential of your company?
You need to carefully consider your bottom line. If the extra costs and workload will impact your bottom line, what will happen to your profits? If there is no potential for immediate profits, then the money and time you will have invested will be wasted.
Important Questions to Ask
Before you choose to incorporate ask yourself some important questions. Weigh your answers carefully to determine whether this is the best solution for your business.
About the Author
The author is associated with shopify which is a leading provider of ecommerce business solutions to both individuals and businesses alike. For more information on how you can give a boost to your offline business by taking it online visit http://www.shopify.com