Written by: Suzanne Cody CPA, CGA, Senior Partner
Let’s start by defining a corporation. By definition, a corporation is a separate legal entity formed by application to either the Federal, Provincial, or Territorial governments. In plain English, a corporation can be thought of as a separate person responsible for its own debts, obligations, and acts.
One of the first things to consider is if your company is earning more than enough for you to live on. If the answer is yes, then it’s time to consider the pros and cons:
ADVANTAGES OF INCORPORATION
-Potentially lower tax rates
-Capital gains deduction
-Private health service plans
-Limited liability
-Transferable ownership
-Continuous existence
-Easier to raise capital
DISADVANTAGES OF INCORPORATION
-More expensive
-Professional advice is required
-Closely regulated
-Extensive record keeping
-Shareholder and director conflicts
-Residency issues
I will discuss each of these considerations in future posts. If you would like to discuss them in person, please call the office at 705-876-6011 or I can be contacted directly at