Innovative Legal Solutions for Toronto Start-Ups Companies and Strategic Business Planning
GLG LLP assists entrepreneurs and start-up companies with the creation of their new ventures. The firm’s business lawyers provide knowledgeable advice on how to best structure a company, how to minimize legal and financial risk, and how to maximize any available financial incentives.
Working alongside the firm’s impressive internal network of commercial real estate lawyers and litigators, the business lawyers at GLG LLP assist new companies with all their legal needs, including:
- Incorporations and business structure planning
- Corporate and commercial agreement drafting;
- Contract negotiations;
- The purchase or sale of a business and/or other assets;
- Commercial real estate transactions or leases;
- Employment agreement drafting; and
- Employment litigation.
GLG LLP provides client-focused service, offering each client the skill and experience of a large firm, with individualized attention. The firm prides itself on delivering high-quality work coupled with exceptional client service at cost-conscious rates.
Business Structures in Ontario
When starting a new venture, it is important to carefully consider the most appropriate business structure. The structure of a business has long-term implications for the owners and operators relating to personal liability, tax obligations and more. It is imperative to consult with a knowledgeable business lawyer to determine the most beneficial structure in each circumstance.
There are three primary legal structures through which most businesses in Ontario operate:
- Sole proprietorship;
- Partnership; and
Each of these structures has its own distinct pros and cons, as well as tax and reporting implications, all of which should be carefully considered.
A sole proprietorship is the simplest business structure available, and many small businesses are organized in this way. Sole proprietorships are unincorporated. They involve one owner who makes all major decisions pertaining to the business. The owner also takes on the sole responsibility for all obligations, contractual relationships, and debts, and in turn, accrues all benefits of the business. There are relatively few legal requirements necessary to start a sole proprietorship as compared with the other business structures. However, given the personal liability involved, it is important to consult with a knowledgeable business lawyer before starting a new venture as a sole proprietorship.
A partnership involves a contractual relationship between two or more persons to run a business together in order to make a profit. Legally, a partnership is not an entity separate from its partners, meaning one or more of the partners will retain personal liability. There are multiple types of partnerships with varying degrees of liability. The lawyers at GLG LLP will review all options with a client in order to determine the most appropriate structure on a case-by-case basis.
Under Canadian law, a corporation is a legal “person” recognized separately from the shareholders of the corporation (i.e. the owners). A corporation can own property, carry on business, incur liabilities, and sue in its own name – entirely separate from the shareholders. The shareholders, on the other hand, own the corporation through their ownership of the shares. The rights, obligations, and liabilities of the corporation are separate from the rights, obligations, and liabilities of the shareholders. There are a number of advantages of incorporating and carrying on business in this way. However, there are also some onerous aspects of operating as a corporation. These include higher up-front expenses, the requirement to provide annual filings and other corporate records, and more stringent legal regulations.
Some key factors to consider when determining the most appropriate structure include:
- Number of owners;
- Tax Planning;
- Income Splitting; and
- Estate Planning.
For Business Structure Planning Assistance Contact GLG LLP
Given the lengthy list of pros and cons and the associated legal implications, it is best to consult with a lawyer before determining whether to operate as a sole proprietor, partnership or corporation. GLG LLP works with companies of all sizes and across various industries. The firm regularly advises business owners on the most beneficial structure for their business. To speak with a GLG LLP business lawyer about any new business venture, fill out the online form or call 416-272-7557.