Before you register a company in BC, you have to decide what form you want your business to take. The type of company you chose will determine things like how you are taxed, whether you are personally liable for business debts, and so on. Choosing carefully in this early stage is often the deciding factor in the long-term success or failure of your business.
Opening your company in BC as a sole trader is perhaps the simplest way to start a business. You alone will have total control of all business operations and can retain all profits after tax. The downside to sole-proprietorship is that you are personally accountable if things go wrong. All business debts are personal debts for sole traders, meaning that assets like your house and car could be on the line when your creditors come after you.
When establishing a partnership the risks and the profits are shared between two or more partners. You should have a partnership agreement in place, to establish the terms of the partnership. This can help you avoid disputes later on.
Incorporating a limited liability company is by far the most popular option for small business owners in Canada. It lets you keep your business finances separate from your personal finances. It is with one or more shareholders, and your personal assets are protected in the event of business failure. On the other side, a limited liability company has many mandatory administrative duties like yearly corporate tax returns.
Hiring a lawyer to help you draw up a partnership, or an incorporation agreement will save you time and protect your interests.
Information packages about incorporating a business, registering a sole proprietorship or partnership, registering an extra-provincial company, society and cooperative are available at
https://www2.gov.bc.ca/gov/content/employment-business/business/managing-a-business/starting-a-business
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