So your thinking about incorporating your business?
Have you thought about incorporating a company? Whether you are an individual, a small group or a large group there are many reasons why incorporation would work for your business.
What is a corporation?
A corporation is a distinct legal entity, completely separate from you.
What are the advantages of incorporating?
A corporation can shield you from liability because the corporation is a separate legal entity. In other words, it is the corporation that gets sued – not you. There can be many tax advantages when you have a corporation, and you also gain access to all sorts of government grants and business loans.
Am I always protected from liability after incorporating?
Not always. You can lose the shield from liability if you have committed fraud or if you have signed a personal guarantee on an agreement or loan (you would be liable to the extent of the terms of the guarantee).
Having a corporation does require yearly maintenance. Filing annual returns, holding annual general meetings and keeping your minute book up to date are all part of yearly maintenance.
Can I just go to a registry office and set up a corporation myself?
Yes, kind of in the same way you can technically do your own taxes. The real question is should you? The agent at the registries office will not sit down and discuss share structuring with you. They will not explain the roles of directors, officers and shareholders to you. They will not ensure that your minute book is properly filled out and that your shares are properly issued. It is assumed that you already know exactly what you need and know exactly what you are doing.
Deciding to start a company is a big decision. It is easier if you start off on the right foot and with a proper foundation!