TO INCORPORATE, OR NOT TO INCORPORATE, THAT IS THE QUESTION.
When starting a corporation, the first choice must be which type of company you want to incorporate. Under the Nova Scotia Companies Act you may incorporate three different types of companies. Choosing which type of company you wish to incorporate will depend on your specific circumstances and needs. The most common type of incorporation is the Limited Liability Company (with shares). The other two types are Limited Liability Company (by guarantee) and Unlimited Liability Company.
Once you have chosen the type of company you wish to incorporate, you must then select a name to reserve for the company, or you can opt for a numbered company. A numbered company simply allows you to file your incorporation documents immediately without waiting for the name reservation process to be completed.
The name can be in either English or French. A Nova Scotia corporation’s name must end with one of the following:
– Ltd.,Ltée; or
Once a name is selected and reserved, the required incorporating documents must be filed. These documents include, but are not limited to:
– Notice of Registered Office;
– Notice of Officers and Directors;
– Notice of Agent;
– Memorandum or Association;
– and Articles of Association.
After your name is selected/reserved and all of your incorporation documents have been filed, the last step is to obtain your corporation stamp/seal and obtain your minute book. The minute book basically holds all of the corporation’s important documents such as shares, certificates, shareholders resolution, and/or director’s resolution.
Professional Corporate Lawyer in Halifax
There are several pros and cons to incorporating a company. Depending on your specific needs and circumstances, it may, or may not be beneficial to incorporate.
SEVERAL PROS OF INCORPORATING
1. One of the greatest advantages is that the shareholders have limited liability for the debts of the corporation. This means that creditors cannot hold you personally liable for the corporation’s debts and obligations. This is possible because the corporation is a separate legal entity. Compared to sole proprietorships and partnerships which holds the owner personally liable for debts and obligations of the company.
2. It is easier to raise capital by selling shares in the corporation to investors. This gives the ability to raise a large amount of capital fairly quickly without taking out any personal loans or debts.
3. If a partner or owner dies, the corporation will still continue, compared to sole proprietorship or partnership in which quite often upon death will result in the company no longer being able to operate.
SEVERAL CONS OF INCORPORATING
1. The costs of incorporating compared to simply starting a sole proprietorship are more costly. This is because you are creating a separate legal entity which requires the help of a lawyer, and due to filing fees for the Registry of Joint Stock Companies ($60-$75 – reserving a name; $454.75 – initial incorporation fee; $80-$130 – minute book and seal);
2. Corporations require separate tax filing; and
3. Corporations require annual meetings.
At McCarthy Kuszelewski Law we have a team of Halifax Lawyers that can help assist with incorporating a company every step of the way. Whether it is reserving the company name, filing all of the appropriate incorporation documents, or compiling the company minute book, our team of Halifax lawyers at McCarthy Kuszelewski Law can help complete any and all of the incorporation tasks.
Do not hesitate to contact us, call today day or night, and we will gladly assist you with your incorporation. Contact 902-431-4405 or 902-499-1597.