Now that you have decided to start your own business in Nova Scotia, you will have to determine what business structure or form of organization suits your needs. The structure of your business will depend on whether you want to run your business yourself or with a partner or associates.
There are four main types of business structures in Nova Scotia: Nova Scotia sole proprietorships, Nova Scotia partnerships, Nova Scotia corporations, and Nova Scotia cooperatives.
Nova Scotia Sole proprietorships
With this type of business organization, you would be fully responsible for all debts and obligations related to your business and all profits would be yours alone to keep. As a sole owner of the business, a creditor can make a claim against your personal or business assets to pay off any debt.
Advantages of Sole Proprietorships in Nova Scotia:
Easy and inexpensive to form a sole proprietorship (you will only need to register your business name provincially)
Relatively low cost to start your business
The lowest amount of regulatory burden
Direct control of decision making
Minimal working capital required to start-up
Tax advantages if your business is not doing well, for example, deducting your losses from your personal income, lower tax bracket when profits are low, and so on
All profits will go to you directly
Disadvantages:
Unlimited liability (if you have business debts, personal assets would be used to pay off the debt)
Income would be taxable at your personal rate and, if your business is profitable, this may put you in a higher tax bracket
Lack of continuity for your business, if you need to be absent
Difficulty raising capital on your own
Nova Scotia Sole proprietorship Registration service
Nova Scotia business name registration for sole proprietorships. If you are using a business name that differs from your full name, you need to register that business name. A sole proprietorship is an unincorporated business that is owned by one individual. It is the simplest kind of business structure. You may choose to register a business name or operate under your own name or both.
In Nova Scotia, sole proprietorship business names are registered by filing a Declaration of Trade Name with the Nova Scotia Registries office. Ecompanies Canada offers fast & easy Nova Scotia online sole proprietorship business name registration service. At Ecompanies Canada we help you step-by-step and take care of the entire business registration process from start to finish. Registering a new business name with us is fast, easy and takes just minutes. Register today your new Nova Scotia sole proprietorship business name. Fast, easy, online for only $39.
A partnership is a good business structure if you want to carry on a business with a partner and you do not wish to incorporate your business. With a partnership, you would combine your financial resources with your partner into the business. You can establish the terms of your business with your partner and protect yourself in case of a disagreement or dissolution by drawing up a specific business agreement. As a partner, you would share in the profits of your business according to the terms of your agreement.
You may also be interested in a limited liability partnership in the business. This means that you would not take part in the control or management of the business, but would be liable for debts to a specified extent only.
When establishing a partnership, you should have a partnership agreement drawn up with the assistance of a lawyer, to ensure that:
You are protecting your interests
That you have clearly established the terms of the partnership with regards to issues like profit sharing, dissolving the partnership, and more
That you meet the legal requirements for a limited partnership (if applicable)
Advantages of Partnerships in Nova Scotia:
Easy to start-up a partnership
Start-up costs would be shared equally with you and your partner
Equal share in the management, profits, and assets
Tax advantage, if income from the partnership is low or loses money (you and your partner include your share of the partnership in your individual tax return)
Disadvantages:
Similar to a sole proprietorship, as there is no legal difference between you and your business
Unlimited liability (if you have business debts, personal assets would be used to pay off the debt)
Hard to find a suitable partner
Possible development of conflict between you and your partner
You are held financially responsible for business decisions made by your partner (for example, contracts that are broken)
Nova Scotia partnership Registration Service
Ecompanies Canada offers fast & easy Nova Scotia online general partnership registration service in Nova Scotia and anywhere in Canada. At e-Companies.ca we help you step-by-step and take care of the entire business registration process from start to finish. Registering a new general partnership with us is fast, easy and takes just minutes. Register today your new partnership in Nova Scotia, fast, easy, online.
Nova Scotia Corporations
Another type of business structure is incorporation. Incorporation can be done at the federal or provincial level. When you incorporate your business, it is considered to be a legal entity that is separate from the owners and shareholders. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. When making such decisions, it is always wise to seek legal advice before incorporating.
Advantages of Corporations in Nova Scotia:
Limited liability
Ownership is transferable
Continuous existence
Separate legal entity
Easier to raise capital
Possible tax advantage as taxes may be lower for an incorporated business
Disadvantages:
A corporation is closely regulated
More expensive to incorporate than a partnership or sole proprietorship
Extensive corporate records required, including shareholder and director meetings, and documentation filed annually with the government
Possible conflict between shareholders and directors
Possible problem with the residency of directors
Nova Scotia Incorporation Service
Ecompanies offers fast & easy Nova Scotia online incorporation and business registration services. At Ecompanies we help you step-by-step and take care of the entire business registration process from start to finish. Incorporating a new business in Nova Scotia with us is fast, easy and takes just minutes.
Register today your new Nova Scotia corporation fast, easy, online for only $99.99
Nova Scotia Cooperatives
The last business structure you could create is a cooperative. With a cooperative, you would have a business that would be owned by an association of members. This is the least common form of business but can be appropriate in situations where a group of persons or businesses decide to pool their resources to provide access to common needs, such as the delivery of products or services, the sale of products or services, employment, and more.
Advantages of Cooperatives in Nova Scotia:
Owned and controlled by members
Democratic control (one member, one vote)
Limited liability
Profit distribution
Disadvantages:
Possible conflict between members
Longer decision-making process
Participation of members needed for success
Extensive record keeping
Less incentive to invest additional capital
The post Starting a Business in Nova Scotia: Choose a business structure appeared first on Ecompanies Canada.
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