The answer to this question will depend on a number of variables as well as your personal goals and comfort levels. While we’re unable to give you a definitive answer, we can highlight a few factors to keep in mind when making your decision:
|Simpler to set up than a corporation||Can be more complex to set up than a business
|The proprietor or partners are directly responsible for
debts related to the business
|No shareholder of a corporation is personally liable for
the debts, obligations or acts of the corporation
|A creditor with a claim against a sole proprietor has a right against all of his or her assets, whether business or personal (unlimited liability)||The corporation is a legal entity on its own and often assumes liability for debts and obligations, along with the directors and officers to a (sometimes) limited extent.
PLEASE OBTAIN LEGAL ADVICE ON THIS SUBJECT
|Jurisdiction is Provincial||Jurisdiction can be Provincial or Federal|
|Business Registrations in Ontario are valid for 5 years and
must be renewed in order to remain valid.
|Incorporations do not need to be renewed but additional
initial and annual filings are necessary.
|Businesses do not need to appoint additional positions.||Corporations need to set out their board of directors (at least 1) and officers (who run the corporation’s day-to-day operations) with an additional Initial Notice filing.|
|An identical name to that of your business can be registered and name protection is more difficult to
|The corporate name is protected across Canada.|
|A name reservation, while recommended, is not
|A name reservation is mandatory prior to incorporation.|
|Less costly to set up than corporations||More costly to set up than Business Name registrations|
|A sole proprietor carrying on business in their own name without the addition of any other words does not need to
file a business name registration