Incorporation Services

Words like Ltd. or Inc. added to your business name makes sure that you stand out of the crowd and make a lasting impression.  Lets discuss the benefits & drawbacks of using the Corporate Structure.

The main benefit of a corporation is that it is a separate legal entity which means it can sue or be sued on its own name, during the due course of business without affecting the owners personally. If you are in an industry where frivolous lawsuits are pretty common, you can save a great deal of headache by simply incorporating your business. Furthermore, it will help you to safeguard your personal assets from the business creditors. 

Corporate structures are the most efficient tax deferral mechanism available to the masses in Canada . It is done so to encourage the business owners to reinvest their profits back into the business and boost the rate of capital creation within the country. A Canadian owned small business corp. utilizing the SBD deduction pays 11% combined tax rate in British Columbia on first $500k in profits. Any subsequent earnings are taxed at 27% combined rate.

Some entrepreneurs like to start as sole proprietor's and wait for there business ideas to mature before incurring the hefty costs of creating a corporate entity. In that case, we have rollover provisions such as the section 85 rollover which allows you to transfer your capital property into a corporation at cost basis.   

Compliance costs of a Corporation is much higher than any other structure. Furthermore, it is an inefficient structure to generate passive income as the total tax paid by the ultimate beneficiary is high.