How can I launch my label correctly?
October 15, 2009 10:42 AM Subscribe
I'm launching a digital record label this month. I live in Canada on an unrestricted work permit. I'm still a US citizen. Can I incorporate? Should I incorporate? Where?
What should I do to make this official? I've been so busy getting everything in order that I didn't realize I might have to do something with any money that comes in... What steps should I take to make sure everything is legit? Should I incorporate, or is there something else similar I should look into? We're going to be pretty low volume for a while, nothing too serious, but I want to be sure it's solid if I'm talking to artists about releasing their stuff.
What should I do to make this official? I've been so busy getting everything in order that I didn't realize I might have to do something with any money that comes in... What steps should I take to make sure everything is legit? Should I incorporate, or is there something else similar I should look into? We're going to be pretty low volume for a while, nothing too serious, but I want to be sure it's solid if I'm talking to artists about releasing their stuff.
I believe that at least one of the directors of a Canadian Corporation must be a Canadian citizen and resident. I remember having to certify that when I incorporated a company in Alberta. YMMV.
posted by blue_beetle at 3:26 PM on October 15, 2009
posted by blue_beetle at 3:26 PM on October 15, 2009
My understanding is that one of the main reason to incorporate is to protect yourself from liability. I.e., if you're incorporated and get sued, only the corporation's is liable. I'm self-employed as a sole-proprietorship, but in a field where a suit is very unlikely, and when I've asked my accountant about incorporation he says it's not worth the expense and hassle in my case. Your case is, of course, different. Talk to an accountant and/or lawyer to be sure.
Another reason for incorporating would be if you want to keep the company's income separate from personal income, since corporate taxes are often lower. Also, if you need a more complex ownership structure than sole-proprietorship or partnership.
Sorry, I don't know how your status in Canada would effect incorporating here. But if your work permit is truly unrestricted, I'd think you could do this as a sole proprietorship no problem (just like if you were a Permanent Resident). You'd file your taxes with the CRA as usual (and the IRS of course, since you're an American citizen, but the tax treaty should prevent you from actually having to pay US taxes). My wife was self-employed under an unrestricted work permit in Canada and there was nothing special to it.
posted by Emanuel at 5:07 PM on October 15, 2009
Another reason for incorporating would be if you want to keep the company's income separate from personal income, since corporate taxes are often lower. Also, if you need a more complex ownership structure than sole-proprietorship or partnership.
Sorry, I don't know how your status in Canada would effect incorporating here. But if your work permit is truly unrestricted, I'd think you could do this as a sole proprietorship no problem (just like if you were a Permanent Resident). You'd file your taxes with the CRA as usual (and the IRS of course, since you're an American citizen, but the tax treaty should prevent you from actually having to pay US taxes). My wife was self-employed under an unrestricted work permit in Canada and there was nothing special to it.
posted by Emanuel at 5:07 PM on October 15, 2009
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posted by You Should See the Other Guy at 10:45 AM on October 15, 2009