Incorporation can be done at one of two levels: federal or provincial/territorial. When your business is incorporated, it will then be considered a legal entity that is separate from any shareholders. If you are the shareholder of a corporation, you will not be liable for any debts, obligations or any acts of the corporation. There are tax considerations with corporations and annual compliance, but these typically do not circumvent the advantages of being incorporated. If there is more than one shareholder, a shareholders agreement is imperative as it can address many issues, including cash calls if the company needs money or the removal of a shareholder or director of the corporation.

A partnership is a non-incorporated business that has been created in collaboration with two or more people. Entering into a partnership structure means that you and your partner(s) will have your financial resources combined and put towards the business. This also means that you and your partner(s) would share any and all profits of the business. While you don’t have to have a partnership agreement, it is highly recommended, as the agreement will address future disputes and disruptions in the business (i.e. death of a partner).
There are several different types of partnership:
A general partnership where each partner is equally liable for any and all debts that the partnership may face.
A limited partnership where a person is able to contribute to the business but is not involved in its operations.
A limited liability partnership is typically afforded to a group of professionals. Groups such as lawyers, financial accountants or medical professionals.
Before entering into a partnership, having a partnership agreement is crucial. A partnership agreement will establish the terms of the partnership to help avoid any disputes relating to business operations. Seeking out legal counsel can help you save both time and money moving forward with your venture.

𝗦𝗼𝗹𝗲 𝗣𝗿𝗼𝗽𝗿𝗶𝗲𝘁𝗼𝗿𝘀𝗵𝗶𝗽
If you are a Sole Proprietor, then you and the business may be considered one in the same, which means you are fully responsible for all debts and any obligations pertaining to your business. As the sole owner, any profits made are entirely yours. However, as you are personally liable, any creditor can make a claim against business – and personal – assets in order to collect any debts. So, if you have a business and a home and your business is sued, your personal assets are also at risk. Furthermore, if you are operating under a sole proprietorship and want to use a business name, you will need to register it.