Should I Incorporate My Small Business In Canada

1. Should I Incorporate My Small Business In Canada? https://www.maroofhs.com/business-incorporation-canada/

2. 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.

3. • 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.

4. • 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.

5. You can reach us at: 3-100 Hanlan Road, Woodbridge, ON L4L 4V8 Phone: (647)724-4308 Email: Canada@MaroofHS.com https://www.maroofhs.com/contact/ https://twitter.com/MaroofHS https://www.facebook.com/MaroofHSCPA