My personal opinion is that at the present, with the direction that we seem to want to take with our venture, the best solution would be to incorporate, as we would likely be doing a substantial amount of business with not only other provides, but other countries as well - both in terms of importing as well as exporting. Some of the other advantages as well of incorporating include having limited liability among our board of directors and right along with that, protection of our personal assets due to the corporation being its own separate legal entity. If we also were to become a publicly traded company as well, it would make raising capital easier as we would have the ability to issue shares.
Some of the drawbacks would include a higher need for startup capital as the cost to incorporate is greater than forming a partnership as well as a great deal more paperwork to keep on top of and organized on a frequent basis. The issue also occasionally arises where there is a conflict of opinion between directors and shareholders as to how the business should be run, but all in all, I feel that the benefits outweigh any negative aspects of incorporating.
2 comments:
I definitely agree - Incorporating is the way to go for a business like Kozmetika. Although it may have a higher initial cost, it it much more beneficial in the long run.
I think most of us are looking at incorporating; however, the only thing that I am still unclear about is to what extent do we have to incorporate outside of Canada. I know we have to extra-provincially incorporate in each province in Canada, but Alison failed to clarify exactly what is needed and how expensive it is to conduct business in the US as well as Canada. I'm going to do some research of my own, but maybe keep me updated on what you guys find out - it would be helpful!
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