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Canadian lawyer and entrepreneur here. The Canadian equivalent is a Federal corporation ($200 filing fee + $20/yr). The government's online step-by-step system
by a3camero 10y ago
Canadian lawyer and entrepreneur here. The Canadian equivalent is a Federal corporation ($200 filing fee + $20/yr). The government's online step-by-step system does most of the work for you, but doesn't touch the share issuance part. You'll need to do that yourself but there are lots of resources available online for how to issue shares to yourself.
The main cost is hiring an accountant to do the tax return for you. Or figuring out how to do it yourself using software like TaxTron.
If you have employment income + your side project involves a lot of ongoing losses then it may be a good idea to use a partnership or sole proprietorship for tax reasons.
Talk to your lawyer/accountant. There are fewer lawsuits here so you may decide a sole proprietorship (unincorporated business) is fine. Each province has some equivalent of a "Master Business License" that allows you to use a name other than your own for business purposes (so you can cash cheques, etc.).
To conclude (for Canada): generally startups go with a corporation. Side projects might be a corporation, a partnership or a sole proprietorship.
- kspaans 10y agoThe main cost is hiring an accountant to do the tax return for you. Or figuring out how to do it yourself using software like TaxTron. Not that I have anything against accountants, but what kind of effort are we talking for filing the taxes yourself? 5 hours vs 1 for a personal income tax return? 10 hours? A weekend? How many pages are there for a corporation (in the simplest case -- I'm sure there is quite a range)?
- debacle 10y agoDepends on the state, but coming from one of the more complicated ones, you can do your LLC related tax duties in a day assuming you've done the requisite and semi-substantial reading.
- Guest98123 10y agoYou could also pay an accountant for a year, and then you have a copy of the forms they prepared, and you can ask questions. At that point, you have a template you can use for future years.
- rbritton 10y agoSome tax forms don't have much for software options either, so you end up doing a lot of manual calculations. I've never come across anything for OS X that will do 1065 (the equivalent of 1040 for LLCs, general partnerships, and a few others).
- a3camero 10y agoHere's the main T2 form: http://www.cra-arc.gc.ca/E/pbg/tf/t2/README.html http://www.cra-arc.gc.ca/E/pbg/tf/t2/README.html If you're annoyed about the cost now, wait till you find out about major firms outsourcing work to India and elsewhere for routine tax work.
- enraged_camel 10y agoIt's not about effort but rather risk, specifically the risk of filing incorrectly and getting fined (or worse, audited) by the IRS.