Are you ready to take your side hustle from hobby to enterprise? Do you need help navigating murky legal waters as you continue to grow and face increasing consumer demands from your customers? The transition from a small grassroots organization to a full-fledged incorporated company can feel daunting but is also one of the most exciting moments for any entrepreneur. Incorporation is a major step that prepares your business for the next phase of advancement. By making your business a legal entity, you remove personal liability from yourself, gain access to flexible tax benefits, and face plenty of other perks that make growth easier.
Paperclip Law is proud to offer comprehensive corporate legal services to entrepreneurs, startups, and established companies looking for support throughout the greater Vancouver region. From taking your first steps into the corporate world to solidifying your place as a titan in your industry, we’re here to help you tackle the market, one challenge at a time. Below, we’ll discuss some basic points to keep in mind regarding incorporation. Read on to learn more.
What Does Incorporation Mean?
In legal terms, incorporation refers to the process of turning your business into an independent legal entity that is separate from its owners and/or directors. Once a company is formally incorporated, all assets and income are considered to be separate from the owners’ and shares are issued to individuals in a manner that reflects their individual stake in the business. Corporations can be formed on either a provincial or federal level and will be required to pay their own taxes, can purchase and own property or investments, are able to file and respond to lawsuits as needed, are eligible for loans, and more.
Deciding when to incorporate is one of the most pressing questions facing business owners, and the fact is, there are many different reasons that can spur someone to take the plunge. From an operational standpoint, incorporation gives the company longevity, even in the event of the sudden passing of shareholders. Legally, incorporation is extremely advantageous as it limits your personal exposure and liability for debts, obligations of the company and actions taken by the corporation. Financially, incorporation entitles the business to lower tax rates as well as flexibility with tax planning and makes it easier to earn money by selling shares.
Additional reasons to consider moving forward with incorporation include gaining the ability to simplify ownership by transferring shares as needed, introducing stock options for employees, increasing your ability to apply for grants and loans, and gaining access to the wide variety of small business deductions available.
What You Need to Keep in Mind
As with any major decision in business, incorporation isn’t just about the benefits. Transforming your business into a corporation has a few additional aspects that you’ll want to be well aware of prior to filing, including setup costs, double tax returns, and strict compliance guidelines that you will need to adhere to. Partnering with an experienced legal team makes it easy to navigate these ups and downs with confidence and create a business structure that works for your needs today, tomorrow, and in the many years to come.
If you’re ready to take on the market and build your corporate legacy, Paperclip Law is here to assist you every step of the way. Serving clients throughout the Lower Mainland, our corporate services include support for incorporation matters, disputes, as well as day to day matters. Learn more by viewing our services, or by contacting us today!