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.