Incorporate a Company
in Canada
Did you decide to start your own business and need a Canadian corporation? Are you looking for a job, but your employer requested you to incorporate your own corporation? Are you working as a professional and need to incorporate a professional corporation? Do you have an already established business but need another corporation for a different type of business activity to claim additional small business tax deductions? Do you need a holding company to protect your patents?
Our company is able to assist clients with incorporating a company in Canada for any of the above mentioned business structures in the following jurisdictions: Federally and provincially in Alberta, British Columbia, Manitoba, New Brunswick, and Ontario.
Many people wonder why business owners choose to spend more money to incorporate a corporation and hire accountants to prepare and file corporate tax returns, rather than registering a simple sole proprietorship and starting business at a lower cost.
The primary and most significant advantage of incorporation is the limited personal liability. When a business is incorporated, the owners are legally separate from the corporation, meaning their personal assets are protected. If the corporation takes on debt or is unable to repay a loan, the owners are not personally liable. This protection allows entrepreneurs greater freedom to take risks and pursue growth opportunities with confidence.
Benefits of Incorporation
A corporation has the same rights and obligations under Canadian law as a natural person. A corporation can acquire assets, go into debt, enter into contracts, sue or be sued, etc.
Shareholders of a company are not liable for the company’s debts.
If the company goes bankrupt, then a shareholder will not lose more than their investment (unless the shareholder has provided personal guarantees for the company’s debts). A creditor cannot sue shareholders for liabilities incurred by the corporation, even though shareholders are owners of the corporation.
A corporation is taxed separately from its owners and generally at a lower tax rate.
For example, a Canadian controlled private corporation incorporated in Ontario pays 15.5% tax rate on the first $500,000 of taxable income.
A corporation is able to hold after tax income and invest it in different projects without triggering any tax obligations for its owners.
In comparison, a sole proprietor conducting business in Ontario pays 40.16% income tax, when the taxable income exceeds $132,406.
Raising capital is often easier for corporations than for other forms of business registrations.
For example, a corporation is able to issue shares to those who invest money in the corporate business. Other forms of business must rely solely on their own money and loans.
Corporations often are able to borrow at a much lower rate than other forms of businesses. Banks usually consider loans to corporations as being a less risky investment.
Unlike a sole proprietorship or partnership, a corporation does not cease to exist upon the death of its owners.
Ownership could be transferred to another person and the corporation would still live on. Having continuous existence gives the business greater stability and ability to plan over a longer term.