Key Benefits Of Incorporating A Business In British Columbia
When you incorporate a business, it becomes a separate legal entity. It then has a life of its own that is separate from its stakeholders. If you live in British Columbia, you can incorporate your venture in two major ways: provincial or federal.
As the name suggests, provincial incorporation is suitable for smaller companies whose reach and operations are limited to a specific province. Larger companies with a wider reach need federal incorporation.
Whichever route you choose, the benefits of incorporating will remain the same. All you need is an experienced business incorporation lawyer to guide you in the process and bring a separate legal entity to life.
Here are a few key benefits of incorporating a business in British Columbia:
Limited Liability
Once a business is incorporated, its liability is independent of its shareholders’ personal assets. A company can pay off its debts only with the assets it owns. As a business owner, you won’t be at risk of losing your personal assets to settle your company’s debts. This gives most entrepreneurs the confidence to incorporate their ventures without being financially insecure.
Perpetual Existence
Your company’s life will be much longer than yours after incorporation. One of the biggest benefits of incorporating a business is its perpetual existence. Theoretically, an incorporated company lives on forever. Shares can be transferred to a holder’s heir or sold on the stock market if an owner passes away. Sole proprietorship ventures, on the other hand, end with the demise of their owners.
Seamless Transfer Of Ownership
When you own an incorporated business, you do not directly own its assets. Your ownership is limited to the shares you have. Such a lack of direct ownership makes ownership transfers easier. You need not take into account the assets you own while transferring your ownership. You can simply sell your shares and leave the venture. Your personal assets and liabilities will remain untouched.
Attracting Investors
Easy ownership transfer is directly related to attracting more investors. An investor, whether they are a venture capitalist or an angel investor, will always prefer an incorporated company over a sole proprietorship.
Incorporated businesses assure the investors of getting in and out of their deal seamlessly. They need not worry about hampering the organization’s operations and management in the process.
Better Credibility
Incorporated businesses in British Columbia enjoy better and quicker credibility. People across the board, from investors to vendors, consider these ventures to be serious for long-term expansion. Incorporating your business makes it easier and faster for you to get credit. Such credibility makes negotiating with your suppliers and seeking financial help from institutions easier.
Capital And Grants
Incorporating your company in BC makes raising capital easier. Sole proprietors often struggle more to convince investors and bring in capital from different sources. An incorporated venture enjoys more credibility and can raise capital by issuing shares to the public. Access to more capital will directly reflect on your company’s growth and expansion in the years to come.
Moreover, the British Columbia government has specific grants for incorporated businesses. You can look up the grants your business is eligible for with the help of your corporate lawyer in BC.
Tax Benefits
Entrepreneurs in British Columbia can save taxes by incorporating their ventures. Personal income tax rates are often greater than the corporate tax rates, increasing the tax burdens on sole proprietors. Incorporated businesses also receive various tax deductions not applicable to partnerships and sole proprietorships.
Better Income Management
Once your incorporated business gets stable and thrives, you can manage your personal income better. Entrepreneurs have various flexible income management options like salaries, dividends, and more. Every shareholder of an incorporated company benefits from its successful run in the industry.
Some Considerations Before You Incorporate Your Business In BC
Now that we know the major benefits of incorporating a business in British Columbia, let us explore a few considerations:
Bearing The Cost
Incorporating a business comes with various expenses. Entrepreneurs in BC pay annual filing expenses, initial incorporation fees, accounting fees, legal fees, and more. If you run a startup or a small business in British Columbia, ensure that you have enough funds to incorporate your business.
Navigating Complexities
Running an incorporated business is clearly more complicated than a partnership or sole proprietorship. You and your team will deal with a lot of paperwork and follow various regulations at the provincial and federal levels. While the rewards are high, be prepared to navigate the complexities coming your way.
No Personal Control
Incorporating a business in British Columbia makes it a separate legal entity. This means that you will no longer have complete personal control over your venture. The more your business grows, the more decentralized its power structure becomes. Entrepreneurs should be willing to share the control and responsibilities after business incorporation in BC.
Making Disclosures
Incorporated businesses give you little privacy. They need to make various public disclosures to maintain trust and credibility. Information like financial performance, owners’ details, ownership structure, and much more may become public knowledge. Some entrepreneurs may not be comfortable with such transparency.
Legal Considerations
As complexities increase, so do legal considerations after incorporating a business in British Columbia. From preparing contracts like shareholders agreements to employee contracts, you will be dealing with various legal matters throughout your journey as an entrepreneur. Ensure that you have sufficient legal help before and after incorporating your business in BC.
Incorporate Your Business In BC With Cube Law’s Corporate Lawyers
If you are planning to take the leap, our corporate lawyers in BC will help you incorporate your business efficiently. Expect comprehensive help in preparing documents, reviewing contracts, and fulfilling all legalities to give your venture a separate legal entity. Our lawyers will also assist you after incorporating your business. Whether you want to draft a precise shareholders agreement or a commercial lease, Cube Law will be happy to help. Our clients trust our legal professionals for tailor-made services, affordable fees, and legal acumen.