Corporations

Question 1

What are the three forms of business structures

Answer 1

1.Sole proprietor
2. Partnership
3. Corporations

Question 2

Advantages of sole proprietor

Answer 2

• low start up costs
• owner in direct control of decision making
• all profits to owner

Question 3

Disadvantages of sole proprietors

Answer 3

• unlimited liability ( this means you are pretty much liable for anything against your company)
• lack of continuity in business ( if you die so does your business
• no name protection unless you choose to incorporate your business

Question 4

What is a partnership?

Answer 4

You and one or more owners share the management of a business

Question 5

Advantages of partnership

Answer 5

-Low start up costs
- additional source of investment capital ( from other partners)

Question 6

What is a Corporation?

Answer 6

Type of business organizations created by legislation

Question 7

The two types of corporations

Answer 7

Public company
Private company

Question 8

What’s the difference between a public corporate company and private company?

Answer 8

-A public company has its shares listed, and traded on a stock exchange
- A private company is typically a small company with very few shareholders and its shares aren’t offered to the public

Question 9

What are the steps to incorporating a company in BC

Answer 9

1. Reserve company name with registry
2. Enter into an incorporation agreement
3. Establish company’s and prepare notice of articles
4. File an incorporation application with the corporate registry

Question 10

What are Notices of articles?

Answer 10

• it must show company’s name, the authorized share structure, the addresses of the registered and records offices, and the names and residential or business addresses of the directors
• this document needs to be filed together with the incorporation application