Starting a new business?
Thinking of incorporating a company?
If you are starting a new business, and thinking about incorporating a BC company, there are decisions to be made and steps you will need to take.
1. If you want your company to have a name (and not be known by a number), you need to submit the name to the BC Corporate Registry for approval which takes 24-48 hours to process.
2. You have to decide what kind of shares to issue and to whom the shares will be issued. Your accountant often can provide guidance or direction on how to set up the company to reduce the taxes paid on your business income.
3. You need to decide who will act as the directors and officers (such as President and Secretary). For a small business with one or two owners, the owners are usually appointed but there may be reasons to appoint other people.
4. Where there is more than one shareholder, you should have a shareholders’ agreement that covers issues relating to management issues including who fills certain roles in the business, financing of the company, how you secure additional money to keep the company operating, and what happens if a shareholder passes away or becomes disabled.
5. Once you deal with these items, you need to prepare incorporation documents, which include Articles for the company and resolutions to issue the shares and appoint the directors and officers, who will also have to sign consents to act in those roles.
6. Once incorporated, you will need to file an annual report with the Corporate Registry and prepare directors’ and shareholders’ resolutions.
If you plan on carrying on more than one business activity, you might consider a separate company for each venture, which helps avoid any creditor issues between the separate ventures.
While you can incorporate and maintain a company yourself, many people hire a lawyer to set up the company and prepare and file the documents required annually.
When starting a new business, you might be worried about the budget for legal and accounting advice. However, getting proper advice at the outset on the company’s structure, how you will address issues that arise and establishing an exit strategy for everyone concerned, you can reduce the possibility of disputes arising or having to make changes to your business structure in the future, which will generally prove more costly than what you would invest when incorporating.
For a free legal consultation to discuss your business, real estate, employment, or estate matters, contact:
Jason D. Jakubec
Lawyers West LLP
Main Line: 778-588-7051
Toll Free: 1-888-988-7052
As seen in SNAP Coquitlam.