The form of business ownership describes how a business is legally set up. In other words, the form of business ownership is the business' legal structure.
There are other forms of business ownership available in Canada as well, such as the limited partnership, cooperatives, and societies, but the three listed above are the main choices for anyone starting a business.
Don't confuse the legal structure of the business with the type of business, such as retail, service, etc. Most types of business can have any form of business ownership.
The legal structure you choose is one of the most important decisions that you'll make when you're starting a business. Each form of business ownership has its own liabilities and responsibilities.
For instance, while a corporation is more expensive to form and maintain, it provides the business owner with more personal liability protection than the sole proprietorship or common partnership form of business ownership. (See A Comparison of the Forms of Business Ownership in Canada.)
The process of creating and registering each form of business ownership differs as well, although the general process is similar from province to province. The Business Registration section of this website provides information on registering a business in different jurisdictions across Canada.
The form of business ownership you choose will affect many aspects of your business' operation, from attracting potential clients through filing taxes, so it's important to choose wisely. You may want to seek professional advice to help you decide.
Also Known As: Major forms of business organization, legal forms of business.
Common Misspellings: Forms of buisness ownership, forms of bizness ownership, forms of business onwership.
Examples: Teresa chose the sole proprietorship form of business ownership for her work as a freelance graphic artist.