Before you get your business off the ground, it’s crucial to choose a legal structure that best fits your company’s needs. The legal structure you pick for your business has an impact on the amount of taxes you pay, your ability to raise money, the amount of paperwork you’re required to do, and the personal liability you face. Most Canadian small business owners choose from the four major types of business structures: sole proprietorship, partnership, cooperative, and corporation.
At first, you’re likely to choose a sole proprietorship, since it’s relatively simple to set up compared to other legal structures. Also known as a sole trader, a sole proprietorship is the least complex business form for one person who owns and runs the company.