Section 2: Operating a Business

In the first section, we examined different issues involved in starting a business. The next two sections deal with the operational responsibilities of running a business.

Lesson 1 : Legal Requirements

Twin Peaks Guest Ranch is the name Nancy and Steve have chosen for their family-owned business. This name is ideally suited because it relates important information to the consumer. Everyone has an idea of what services a guest ranch provides, and the imagery associated with Twin Peaks is likely to be that of a pristine and healthy outdoor environment.

However, if Nancy and Steve decide at some future time that this name is not appropriate, it is possible for them to change it. The law allows for a name change of a business at any time, providing an application is made to the appropriate government office.

Suppose that Nancy and Steve plan to incorporate their business. To do this, the owners must prepare and file with the government articles of incorporation, which allows the company to select a name or have a numerical number assigned to the business. When filing a name, the business must pay for a search of the names of all other registered companies. This is to allow the government to determine whether another company's name is so similar that confusion might arise. If it is determined that there is a similarly named company already registered, then the new business will not be able to become incorporated under that name. The business will have to select some other name and start the process all over again.

Also, a company is entitled to operate under a business name in addition to its legal corporate name. For instance, Nancy and Steve's legal corporate name could be XYZ456789 Alberta Ltd., and they would still be able to conduct business under the name of Twin Peaks Guest Ranch. However, all legal documents and agreements entered into by the company must be done under its legal corporate name.

To be legally entitled to operate a business, the owners must ensure they obtain any necessary government licenses and permits. By regulating the industry, the government can control important aspects of the industry. For instance, this allows them to

• monitor and control the number of people or businesses operating within a certain industry

• establish standards throughout the industry

• maintain quality control
  
  

Licensing requirements also apply to different aspects of the business. These include

• the business itself - a business license is usually an operational necessity, and in such cases, failing to have a license may result in fines and/or imprisonment for the owner(s) of the business.

• the owner(s) of the business - ownership in some types of businesses are regulated in that they require a certain share of it to be held by a licensed professional in the field; for example, an individual could not operate a pharmacy unless a licensed pharmacist owned a percentage of the business

• employees working for the business - the nature of the business will dictate whether licensed employees are a requirement; for example, in an auto-body shop it would be necessary for the business to have certified machinists working or overseeing work being performed on car repairs

• the equipment used in a business - in order to meet health and safety regulations, it may be necessary to obtain licenses in regards to the use of certain equipment; for example, in restaurants only commercial dishwashers may be installed as the temperature settings for these need to be at a higher level than those available on machines used by the general public