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Setting up a Sole Proprietorship

Expert: Julie

Stacy asked:

"I was thinking of purchasing an adult website from Infotel Services Bureau. They will set up the site and all I have to pay is a one-time fee, plus a monthly maintenance fee, and advertise my site. Would this be considered a small business? Could I set up a sole proprietorship out of my home?"

Julie answered:

"Yes, the business relationship you describe will be considered a small business. You will have monthly operating expenses, and will collect revenue from the advertising on your website. Revenue Canada will expect you to eventually generate a profit to be considered a business, and I would assume that this would be your goal also.

The biggest questions you will face in the short term will be the decision about what structure your new business should have, and whether or not the business you are looking at buying into meets your needs.

There are many business opportunities available today, and it is wise to take a close look at the business before making a final decision. Take a close look at the numbers, and at the promised returns, and make a list of questions to ask before you make your final decision. Are there any guarantees of revenue? Does the projected advertising revenue match with what others in the same industry are getting today? Due diligence in the short run can save you money and frustration in the long run.

If you decide to buy into this business, or another business, the next step will be to register your new company. You can operate under your own name, or you can register the business. If you will be the sole owner of the business, you can register a sole proprietorship or incorporate the company. It costs less to register a sole proprietorship, but an incorporated business offers more protection. For more information on the differences between these two types of businesses, you can read this past ask-the-expert question:

I hope that helps! We now have over 300 articles archived on CanadaOne, so you should be able to find much more information as you progress by using our "Search this Website" feature.

About the author

Julie King is the co-founder and managing editor of CanadaOne, Canada's first small business portal.

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