Business Structure

Sole Proprietorship

In a sole proprietorship, the owner is 100% liable (legally responsible) for the business, including all debts and actions. The business income tax is filed with the owner’s personal income.

Some examples of common sole proprietorships are housecleaning services, real estate agents, landlords, general contractors, agriculture (those who own farms, ranches, nurseries and orchards), etc.

Pros

  • Low start-up costs
  • Greatest freedom from regulations
  • Owner has full control

Cons

  • Unlimited liability (you can be sued)
  • Lack of continuity
  • Difficult to raise capital
  • Limited transfer of ownership

Partnership

In a partnership, each partner is wholly liable for the business. Debts and profits are shared among the partners. It is strongly recommended that a Partnership Agreement be drawn-up by a lawyer.

Some examples of common partnerships are accounting firms, law firms, doctors’ offices, etc.

Pros

  • Low start-up costs
  • Broader management base
  • Possible tax advantages
  • Limited outside regulations

Cons

  • Unlimited liability
  • Lack of continuity
  • Divided authority
  • Limited transfer of ownership
  • Difficult to find suitable partners

Corporation

A corporation is a distinct legal entity where owners have legal liability up to the limit of their investment. Debts and profits are shared among shareholders. Incorporating can be complicated so legal and accounting assistance is recommended.

Pros

  • Limited liability
  • Ownership is transferable
  • Possible tax advantages
  • Continuous existence
  • Easier to raise capital

Cons

  • Closely regulated
  • Costly to set-up
  • Charter restrictions
  • Record keeping requirements
  • Complex tax rules

Help Me Choose

  • I plan to own and operate this business myself
    • Sole proprietorship
    • Corporation
  • This will be a small business without a lot of risk
    • Sole proprietorship
    • Partnership
  • I plan to share ownership and management responsibilities with others
    • Partnership
    • Corporation
  • This will be a business that has employees and equipment so I would like to limit risk.
    • Corporation
  • I would like to seek investment from other people
    • Corporation

Workshops + EventsView All

Aug 19

Join other women entrepreneurs to learn how to unlock the power of business emotional intelligence with Angela Hoyt of Evolution Group.

Aug 20

The pandemic is changing the business landscape as we know it.

Aug 20

An in-depth look at funding resources from grants to micro-loans, through to venture capital.

Aug 25

If you’re thinking about starting a business, conducting market research is a great place to start.

Aug 26

Join women entrepreneurs from across the Kingston region to discuss how to build and maintain a thriving network during COVID-19.

Sep 17

An in-depth look at funding resources from grants to micro-loans, through to venture capital.