Incorporating your company in Canada has a variety of benefits to you as a business owner. Incorporation effectively means that your business becomes a separate legal entity created under the Business Corporations Act or Canada Business Corporation Act offering a flexible array of ownership, control, and profit participation share structures. A statutory scheme with corporately established rules and governance. Although professional advice is recommended to best design a specific corporation, set up costs are surprisingly low.
A few of the benefits of Incorporation include:
- Very flexible business structure
- A two-year provincial tax holiday for most new businesses
- Creates a marketable entity
- Very flexible ownership options, allowing possible participation of family or key employees
- Allows for different equity contributions, not all owners have to make the same investment
- Allows for non-controlling ownership interests (i.e. non-voting shares) for family, key employees, etc.
- Many income splitting options
- Lower tax rates for high-income individuals
- Limited liability in most areas (tax liability, employee taxes, and wages are not limited)
- Allows preferred ownership interests through preferred share structures giving special rights to prescribed investors
- A Corporation is immortal, creating a flexible and advantageous estate planning tool
There are a few fees associated with incorporation, including a legal fee to set up and an annual fee of to run. However, these are more than manageable and well worth it for the wealth of benefits incorporation offers you.
Are you thinking about incorporating your business? Or just want to learn about the process? Give us a call today to speak to one of our professionals: 250.383.9104. We would welcome the opportunity to work with you to start the steps to incorporate your business