What is a Sole Proprietorship in Canada ?
A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by only one person and in which there is no legal distinction between the owner and the business entity.
In Canada, the most basic type of company entity is a sole proprietorship. It is a sole proprietorship owned and run by a single person. There is no legal separation between you and your firm as a sole proprietor. This means you are personally and financially liable for the company’s obligations or losses.
Other information about Sole Proprietorship in Canada
- To establish a sole proprietorship, no formal action is required. You can start operating under your name or choose a business name and register it using a “doing business as” (DBA) form. While sole proprietorships offer simplicity and ease of setup, they lack the liability protection provided by other corporate structures.
- The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor, and all debts of the business are that of the proprietor; the business is not a separate legal entity. The arrangement is a "sole" proprietorship in contrast with a partnership, which has at least two owners.
- Sole proprietors may use a trade name or business name other than their legal name. They may have to trademark their business name legally if it differs from their own legal name, with the process varying depending upon country of residence.
If you are planning to Set up & Open a Sole Proprietorship in Canada with the above description, contact me
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