Has 2021 seen your side hustle bust into the market and blossom into a growing enterprise? Are you ready to entertain taking the next steps at making your passion into a solidified business that’s set up for success in the future? Making the leap from small-time fundamentals to a big-league contender can often feel like a heavy challenge, but with the right business legal advisors by your side, conquering incorporation and other related challenges can be simple and headache-free. At Paperclip Law, we’re here to guide you through the ups and downs of Vancouver’s business market, as well as the process of becoming an incorporated entity. We’re proud to offer comprehensive corporate legal services to entrepreneurs, startups, and established companies looking for support throughout the greater Vancouver region.
If you’ve been considering incorporation for your small business, but aren’t quite sure what to expect, below are some key aspects to keep in mind. Read on to learn more!
Incorporation: The Next Step to Bigger Business
Incorporation is a significant step for any business, and as with any major decision, brings plenty to the table that you’ll want to consider before moving ahead. Legally speaking, incorporation in the process of turning your business into an entirely separate entity from you, as well as your fellow owners and/or directors. Upon incorporation, all of the company’s assets and funds are considered separate from the owners or employees, and shares are issued in a manner that reflects an individual’s independent investment in the business.
Once acting as a separate entity, companies will be required to pay their own taxes, become capable of purchasing and owning property/investments, may fire lawsuits or respond to legal petitions, gain access to loans and government incentives and more. In essence, incorporation grants both the business and its owner their own degree of autonomy, allowing both to operate separately for the collective good of the company as a whole.
How Do I Know if I Should Incorporate?
The truth is, it’s hard to know exactly when you should incorporate without partnering with a team of skilled legal consultants like Paperclip Law. Your advisors will be able to highlight the various factors your need to consider before moving ahead, as well as help determine your main motivation for moving forward. For example: from a legal standpoint, incorporation is extremely useful because it limits the personal exposure of the owners, as well as your potential liability where debts and lawsuits are concerned. Operationally, incorporation helps protect your business against certain occurrences that can otherwise cripple the company entirely (the death of a founder, for example), and financially, your business will benefit from gaining access to lower tax rates, flexible tax planning, and grants. In addition, corporate entities can also simplify ownership matters, make it easy to procure high-performing employees by offering stock options, and much more.
As you can see, there’s no shortage of perks to incorporation, but, as with any major change, you’ll want to be aware of the challenges involved as well. Be aware that incorporation does take time, will require a decent financial investment, require you to maintain double tax returns, and subject you to stricter compliance guidelines for operations. For many businesses, these trade-offs are well worth the benefits of incorporating, but you’ll always want to check with your legal advisors before jumping into the deep end.
Build Your Legacy With Paperclip Law Today
If you’re ready to move ahead with incorporation and need help laying the foundation to success, Paperclip Law is here to assist. We proudly serve clients throughout the Lower Mainland of BC, and offer business legal services, including support for incorporation matters, disputes, as well as day to day matters. Learn more by viewing our services or by contacting us directly today!