Incorporating can offer tax advantages, limited liability protection and a platform for raising capital.

One of the main advantages in incorporating a Limited Corporation is the limited liability protection it affords a company’s shareholders.  By incorporating, your liability will (with some exceptions) be limited to the amounts you have invested in the company.  This is in contrast to running your business personally, through a sole proprietorship, where all your personal property is up for grabs. 

Also, by incorporating, you are establishing a flexible ownership platform universally recognized by investors.  If you are looking to raise funds for your business, by incorporating, you have the option of doing so through the issuance of shares to new investors. 

There may be tax advantages to operating your business through a company.  Small business tax rates are typically lower than an individual’s personal tax rate.  Accordingly, you may be able to structure your business affairs to take advantage of tax deferral opportunities to the extent that income generated by the company remains in the company.     Secondly, there can often be tax advantages to using dividends (as opposed to a salary) as a means of taking income from the company. Finally, using a corporation creates potential income splitting opportunities.  You may be able to reduce your family’s overall tax burden by paying dividends or salaries to family members who are in lower tax brackets.