Incorporation of your business will offer you some benefits including some of the following:

  • A potential for tax savings and the benefit of deferring taxable income?
  • Limited liability protection against creditors.
  • It may be easier to raise capital through investors.
  • Potential for a better exit strategy.


There are some factors to consider with establishing a corporation:

  • More costly set up and record keeping costs such as incorporation fees, corporate tax filings, corporate maintenance.
  • Decision making can become more shared as shareholders are added.


The question of should I incorporate, really becomes, Is Incorporation right for my business?

Factors to consider also include:

  • Risk of lawsuits in your business
  • Anticipated revenues and expenses of the business
  • Hobby business vs. full time commitment
  • Asset and equipment purchase needs.
  • Active vs. passive income for tax purposes.
  • Will your business be able to benefit from tax savings?


This is a very important decision to make and it is best to have a discussion with a tax professional to determine if a corporation is a good fit for your needs.