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Should you incorporate your small business?

September 24, 2018 - 0

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Often it is not worthwhile to incorporate when you’re just starting a business, but once that business is profitable, incorporation can offer several significant benefits. The main factors to consider are listed below and can provide a starting point in your consideration whether or not to incorporate. It will be our pleasure to meet with you to discuss your particular situation and to guide you through the process of incorporation.

  • Limited liability
  • Managing your income (Salary vs Dividends)
  • To take advantage of the Small Business Deduction
  • To get financing
  • To be eligible for some government programs
  • To take advantage of the Lifetime Capital Gains exemption when you sell

You can incorporate either federally or provincially — which one you choose depends mainly on whether or not you intend to do business in more than one province. If you incorporate provincially, you may have to register and file additional paperwork before you can do business in another province.

Once incorporated, a separate tax return must be filed (T2) in addition to your personal tax return.  It is also required to maintain a minute book and keep up to date records.

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