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Choosing the Right Corporate Form for Your Business

Selecting the appropriate legal structure for your business is a crucial decision that can impact taxation, liability, and overall operations. In British Columbia, there are several options for business owners to choose from, each with its advantages and disadvantages. This article will explore the different types of business structures and guide you in choosing the right form for your business in British Columbia.

Sole Proprietorship

A sole proprietorship is the simplest business structure in which the owner and the business are considered a single entity. The owner is personally responsible for all business debts and liabilities but enjoys complete control over business decisions.


  • Easy to set up and maintain
  • Minimal paperwork and regulatory requirements
  • The owner retains full control


  • Unlimited personal liability
  • Limited fundraising options
  • May be challenging to transfer or sell the business


A partnership is formed when two or more individuals or entities agree to share the profits and losses of a business. In British Columbia, partnerships can be general or limited, each with varying levels of personal liability and control.


  • Easy to set up and maintain
  • Shared decision-making and financial responsibility
  • Additional fundraising options


  • Potential conflicts among partners
  • Unlimited personal liability for general partners
  • More complex than a sole proprietorship

Limited Liability Company (LLC)

Although LLCs are not recognized in British Columbia, the closest equivalent is a limited liability partnership (LLP). LLPs offer limited liability protection to partners and are typically used by professionals, such as lawyers or accountants.


  • Limited liability protection
  • Flexible tax treatment
  • Less formal structure compared to corporations


  • More paperwork and administrative requirements
  • Limited to specific professions or industries
  • This may be subject to additional regulatory requirements


In British Columbia, a corporation is a separate legal entity from its owners (shareholders) and provides limited liability protection. It can be either a private or public corporation, each with its own rules and regulations.


  • Limited liability protection
  • Greater access to funding through stock sales
  • Can have a large number of shareholders


  • More complex setup and administrative requirements
  • Increased regulations and corporate formalities
  • Potential double taxation (corporate and personal)

The right corporate form for your business in British Columbia depends on factors such as the level of liability protection you require, your tax preferences, and your fundraising needs. It’s essential to carefully consider the advantages and disadvantages of each structure and consult with legal and financial professionals to determine which form is best suited for your specific situation. Choosing the right business structure can create a solid foundation for your company’s growth and success.


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Melissa has 8+ years of combined Commercial, Business and Contract Law experience as In-House Counsel in manufacturing, health, real estate development, and broadcast communication industries. She is instrumental in developing strategies to minimize legal risk and ensure regulatory compliance.

She has 6+ years of Human Resources Management experience and a Chartered Professional in Human Resources (CPHR) designation. Her practice includes Family Law, Civil Litigation, Wills & Estates and Real Estate & Conveyancing.

For fun, she visits ancient sites and ruins and belts out popular Broadway tunes.

northam law corporation

Northam Law is a boutique law firm offering advisory services in Real Estate Law and Conveyancing, Business Law, and Human Resources. Our practice areas also include Wills & Estates and Family Law. Notarization services are also available.

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