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FAQs

What are the general advantages of incorporating?
A corporation is its own legal entity separate from the individuals who own it and manage it. As a corporation is its own legal person, it can sue and be sued. Operating as a corporation may offer a liability advantage in that, if the Corporation is sued, generally the assets of the corporation would be subject to recovery, not the personal assets of the shareholder(s).

A corporation may also benefit in part from a preferred tax rate on money retained in the corporation. This can be advantageous as a shareholder may only wish to take out of the corporation the minimum amount required to maintain their desired lifestyle, potentially placing them in a lower tax bracket. If an individual operates a sole proprietorship, all income generated will be attributed to that individual business owner personally.
My business is new, and I do not expect to make a substantial amount of profits in the immediate to short term. Is incorporation right for me?
Financial considerations should not be the only factor in determining if incorporation is right for you. The nature of a specific business may have a high level of liability associated with it and a business owner or owner(s) may wish to segregate their personal assets from those strictly involved in the business.

You are starting a business that requires the purchase of assets and equipment. It may be advantageous to incorporate from the start and purchase these assets in the name of the corporation. This could save costs if in a few years' time you do decide to incorporate, as documentation will be required at that time to transfer the assets owned personally to the corporation.