Sole proprietorship refers to the individual ownership of a business. Here one individual is at the helm taking all the important policy decisions. There is a single chain of command. Also, the responsibility to pay taxes rests on the sole owner’s shoulders. A sole proprietorship signifies the simplest form of business that can be owned in Canada. A single owner has all the reigns under his command in this form of business. Under the Canadian law, the owner and the business are considered one single entity. So, these two entities are viewed as one in the eyes of the law and proceedings are carried out accordingly. Secondly, the owner owns all the assets and resources of the business. Most importantly, the sole proprietor cannot claim employee status under his/her own business. He shall not receive a salary from the business. Instead, he can earn a profit from the business operations. So, the owner cannot be the employee in case of sole proprietorship.
A partnership business model is defined as an unincorporated business where two or more people enter into a business partnership and intend to share the final profits. Here are some important features of the partnership:
- Partnership can be defined formally by an express agreement. Or if two people work in a manner similar to partnership, they can be called business partners.
- Partners are mutually responsible for the business debts and activities of other partners.
- Partners collectively own all the business assets of the concerned business.
- Partnerships are basically of two types. First, general partnerships where profit and loss from the business is shared by the partners. Second is the limited partnership where the limited partners are not responsible for the daily operations but have to share the loss/profit as per their initial share agreement.
- Business partners are not employees working in the business. Thus, they are not provided with employment insurance in case the business fails. There is no salary for the partners. Instead, they earn from the profit of the business.
One of the most preferred ways to start and run a business is registering a corporation. Unlike sole proprietorship and business partnerships, corporations are different in legal aspects. They are independent legal entities and their owners are not connected legally to the corporation. As a result, corporations are responsible for themselves for handling their lawsuits, taxes and assets. The owners do not represent the assets and taxes applied to their respective corporation.A Corporation has owners, officers, shareholders, directors, all of whom run the corporation. However they have limited responsibility pertaining to the corporation.
- Power of Attorney;
- Commissioning of Documents;
- Statutory Declarations