Incorporation or Sole Proprietor

 In News

The decision to incorporate your business is never an easy one. A corporation can be a great tool for your business as it provides limited liability for the owner. Corporations can carry on for an indefinite period and generally, it can be easier to raise money through various types of investments or financing. Corporate structures also allow for a potential tax deferral and allow the owners to optimize their personal income taxes via salary or dividends.

There are also benefits of not incorporating in certain situations. There are potential cost savings as a corporation income tax return would not be required as a sole proprietor. Additionally there are increased costs to set up a corporation that may not be worth it. A sole proprietor may be more flexible from a financing standpoint if the corporate structure does not have sufficient assets to warrant financing.

Every situation is different when deciding to incorporate or not. It is important to seek the proper advice before making this decision.