Personal or Business Chequing Account - Liability | Small business accounts | Discussion forum

As long as you are a sole proprietorship, you are fully liable for the company. It will not matter how or what type of bank accounts you arrange. If you want to limit your exposure, you need to incorporate a limited company entity.

Most people don't bother incorporating until the income of the business is higher than what they personally take out of it. You should talk to a lawyer about that and about liability. Spend a few bucks for competent advice. If you do need a corporation, lawyers often know of one that has been set up but never used, and you can save money by buying one. It will cost you a few thousand though - tax deductible as a business expense.

You do need a proper business account in my view. All banks prohibit using personal account for business activity. Read the fine print on your accounts. They will shut down your account if they suspect business activity. You can get away with it for a while if you don't have too many transactions.

But, really, for anything like this with significant implications, do yourself a favour, spend the money, hire a professional for advice; don't rely on people you don't know on a public forum - including me.

Also, don't rely on US material for Canadian matters.

That site, Business News Daily, is based in the US and has US-based material. Things don't work exactly the same here is Canada.

For example, there's no such thing in Canada as a limited liability corporation (LLC).

There is also no liability protection from a corporation for certain activities. Medical doctors, for example, cannot shield their malpractice liabilities through a corporation.

I agree with most of what MG has said.
We used a lawyer and bought an existing corporation. I never thought of DIY in that regard, but I know we would not have been comfortable with it anyway.