Welcome to part 3 of Our Small Business Info Series
Welcome to part 3 of our ๐๐ฎ๐ข๐ญ๐ญ ๐๐ถ๐ด๐ช๐ฏ๐ฆ๐ด๐ด ๐๐ฏ๐ง๐ฐ ๐๐ฆ๐ณ๐ช๐ฆ๐ด where we will highlight ๐๐ฆ๐๐ฅ๐ฅ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ ๐๐๐ฌ๐ข๐๐ฌ.
This week we continue expanding your knowledge on the types of business you may choose to operate.
๐๐จ๐ซ๐ฉ๐จ๐ซ๐๐ญ๐ข๐จ๐ง โ A corporation is a legal entity, separate from the owners. The corporation earns the income and expenses are paid from the corporation. The owners have shares of the corporation and are called shareholders. Shares of the corporation can be bought and sold, and it does not affect the corporationโs existence. To set up a corporation you need to go through legal steps and complete articles of incorporation. Youโll also need to have a lawyer keep a record of minutes annually and youโll have to file a corporate tax return called a T2.
The corporate year-end does not have to be December 31 but is typically on the anniversary date of the corporate set up. Taxes must be filed within 6 months after the corporationโs year-end.
Because of the costs associated with operating a corporation some people choose to start a sole proprietorship and then move to a corporation as their assets build. Itโs a good way to save tax on money that is kept in the corporation.
Jodi