Explain incorporation to me - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

sclitheroe · 12-16-2005, 01:28 PM

A buddy and I have some business ideas, and we're about ready to get rolling. Problem is we're in different provinces, and the people we need to approach about the concept are in a third province. I've been studying Corporations Canada, at http://strategis.ic.gc.ca/epic/inter.../cs01353e.html, but I was wondering if anybody has some advice for launching a business. Should I be buying a book or something, and if so, what do you recommend?

-Scott

Bend it like Bourgeois · 12-16-2005, 02:00 PM

Step 1a) get a good accountant I know a couple, and there's likely some here

Step 1b) get a good lawyer. as above

Step 2. Let them do the work for you. Whatever you spend you'll recoup 10 fold if your business is successful

Fozzie_DeBear · 12-16-2005, 02:53 PM

You can also go to the Business Link (they are in every province) and get some advice/mentoring there.

If you are going to go for it, I agree with BILB get a good small business lawyer/accountant
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AsianBABE cam

Shazam · 12-16-2005, 04:37 PM

You'll need a lawyer to actually create the business for you. Although you actually don't require one, incorporating is a PITA, and paying a lawyer $500 to incorporate is worth it to avoid the headaches.

Since your associates are in different provinces, make sure that you incorporate federally, not provincially.

You'll need to decide who is on your Board of Governors, and who has signing authority, among other issues. You'll need to decide on your year end. You'll also have to issue shares to determine ownership, which implies that some people may have more ownership than others.

You'll have to also open a business banking account. I highly suggest that you do not use your own personal banking accounts to conduct business transactions.

There are significant tax savings to be had with incorporation. You can pay yourselves out with dividends from the stock that you own. Dividend income is taxed quite differently than employment income. You can also purchase equipment for the company rather than you paying out of pocket. You can also get back GST from company purchases.

Your goal in the first three years of operation is to do whatever is legally allowed to make sure the company loses money so that you don't have to pay taxes...

shoestring · 12-16-2005, 08:48 PM

Have you written a business plan? Do that first and it will point you in the right direction.
Have you started or run your own business before?

Do not go paying for lawyers and accountants until you have figured out some basic strategy for your business.
You can get all the basic info at the main library.
You should probably learn some basic law and accounting you'll need it everyday.
Incorporation might give you some tax advantages but it also costs more and might not be needed at the beginning.

PM me ,I can show you a few different ways to approach business plans and launching a business.
Then you decide on lawyers and accountants.

Maritime Q-Scout · 12-16-2005, 09:33 PM

define: incorporation

answer: the opposite of outcorporation

flamingchina · 12-17-2005, 12:59 AM

To reiterate Bend it..
Find an accountant. Preferably one who has some experience with helping small business. (I as well know some...)
Find lawyer who is experienced with small business's.
But first, draw up a business plan, then do the would you give money to me test. explain it to some people you know (preferibly business people you trust) and see what they think. (not just one or two, get enough to help remove anomilies.)

Tron_fdc · 12-17-2005, 10:44 AM

A lot of automobile registries in Ab do incorporations as well....I did mine at mojo's by Chinook a few years ago.

Another major benefit of owning a corporation is if the company gets sued, you can fold it without any personal implications (ie you lose the value of the company, and not any of your personal worth). This was a major factor for me.....

8 Ball · 12-17-2005, 04:31 PM

My accountant incorporated my company. My advice is to find a good accountant as they are worth thier weight in gold. As for lawyers I would suggest treating them like chiropractors, don't use them unless you absolutely need one.

Hack&Lube · 12-17-2005, 05:15 PM

Goto the law library and pick up a Canadian Corporation Manual or something in lieu of lawyer.

automaton 3 · 12-17-2005, 11:40 PM

Quote:

Originally Posted by 8 Ball

My accountant incorporated my company. My advice is to find a good accountant as they are worth thier weight in gold. As for lawyers I would suggest treating them like chiropractors, don't use them unless you absolutely need one.

I couldn't disagree more. It probably cost the about same for your accountant to set up the corporation as it would have cost to use good legal counsel, who probably would have provided you with a much better product. Most accountants simply don't have the knowledge, training or experience to set up anything outside of a very basic corporation (sole director/ shareholder).

Anything more complex than that, or if you ever wish for your company to raise capital going to a lawyer is an absolute must.

sclitheroe · 12-18-2005, 09:55 AM

Thanks for all the info and advice guys!

-Scott

killer_carlson · 12-18-2005, 11:12 AM

Quote:

Originally Posted by 8 Ball

My accountant incorporated my company. My advice is to find a good accountant as they are worth thier weight in gold. As for lawyers I would suggest treating them like chiropractors, don't use them unless you absolutely need one.

bull****.

Automaton is absolute correct here.

troutman · 12-18-2005, 12:47 PM

Quote:

Originally Posted by 8 Ball

My accountant incorporated my company. My advice is to find a good accountant as they are worth thier weight in gold. As for lawyers I would suggest treating them like chiropractors, don't use them unless you absolutely need one.

No one should ever go to a chiropractor (except for lower back pain). Lawyers are great.

Shawnski · 12-18-2005, 02:36 PM

Incorporation is easy if you are a sole entity (like a contractor). You don't need an accountant or a lawyer to do it. BUT, whenever a "partner" or other entity is involved in your biz, yes, go the lawyer route. The initial agreement that you and your partner(s) sign is paramount.

8 Ball · 12-18-2005, 04:54 PM

Quote:

Originally Posted by killer_carlson

bull****.

Automaton is absolute correct here.

And how may I ask is that bull****? I didn't say not too hire a lawyer, I said don't hire one unless you have to. I agree with Automaton that if you are starting a complex business that you may need one. The original poster was wondering if he should buy a book or something on incorporating which led me to believe that this was not the case.

8 Ball · 12-18-2005, 05:08 PM

Quote:

Originally Posted by automaton 3

I couldn't disagree more. It probably cost the about same for your accountant to set up the corporation as it would have cost to use good legal counsel, who probably would have provided you with a much better product. Most accountants simply don't have the knowledge, training or experience to set up anything outside of a very basic corporation (sole director/ shareholder).

Anything more complex than that, or if you ever wish for your company to raise capital going to a lawyer is an absolute must.

I agree with you in respect to multiple share holders and complex corporations. It comes down to the type of business you wish to start up. A friend of mine just incorporated his company through a lawyer and it cost him three times what it cost me. But for the record both corporations are fairly basic.