Should I Incorporate My Small Business In Canada
                     Should I Incorporate My Small Business In Canada?
https://www.maroofhs.com/business-incorporation-canada
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Should I incorporate my small business in Canada? When should I 
incorporate? I was told I could save tax if I incorporate – is this 
statement holds true? What are the advantages & disadvantages of 
incorporating your business?
Benefits of incorporating your small business:
Let’s start with a list of the pros of incorporating your small 
business in Canada.
• Limited liability – Running your business through a corporation 
gives a safety layer against personal liability. It makes it more 
challenging for someone to go after your personal assets if the 
business defaults on its debts.
• Tax savings & deferral – In some circumstances, corporations 
have a lower tax rate in comparison to individuals. Running your 
business via a corporation in place of a proprietorship can aid to 
defer and save taxes.
• Estate planning – A corporation is a detached entity to you, so it 
persists to live on irrespective of what happens to you. This can be 
useful when thinking about transferring your possessions to others.
• Income splitting – Income splitting happens to be a main reason 
for incorporating your business. Since 2018, this has changed 
drastically because of some new tax rules, and it’s now much less of 
a benefit.
• Lifetime Capital Gains Exemption – It allows some incorporated 
businesses to sell at a gain of up to $866,912 without paying any tax 
if they meet the criteria.
Cons of incorporating your small business in Canada:
When deciding whether to incorporate, you’ve to weigh the pros 
against a list of cons, which we will discuss below:
• Incorporation costs – There’re costs involved when starting a 
business. Having the help of a lawyer to draft the documents of 
incorporation is an excellent idea, but it does not come cheap.
• Administrative burden – The Corporation needs legal & tax 
filings every year to stay in good stead with the administrators. This 
needs attention and is a time commitment for the owner.
• Losses are more complex to use – If your business suffers 
monetary losses, it’s more complex in a corporation than in a 
proprietorship to make use of those losses to decrease future taxes.
• Pay more taxes – In some cases running your business via a 
corporation could actually mean you pay more taxes than if running 
as a proprietorship especially if you fall into Specified investment 
business or personal services corporation categories.
There’re many factors to take into consideration before hiring a 
business incorporation service for your small business in Canada.
Here at Innovation Hub by Maroof HS Ltd., we can help you start 
your business on the right track. If you are still unsure about 
incorporating your small business, we can have a talk and then 
decide what is most suitable for you.
The added advantage of incorporation with Innovation Hub is a free 
professional income tax consultancy to get you started right with 
your corporation.
You can reach us at:
3-100 Hanlan Road, Woodbridge, ON L4L 4V8
Phone: (647)724-4308
Email: [email protected]
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