Corporate & Commercial

Incorporation involves creating a new corporation. A corporation is a “legal person” that can do just about anything a regular person can do. A corporation can own property, enter into contracts, borrow money, sue, be sued, and go bankrupt.

The first advantage of using a corporation is that your personal assets are protected if your business is sued, or it goes bankrupt. When a corporation runs out of money, creditors and claimants cannot pursue the corporation’s owners (except in a few narrow circumstances that usually involve fraud on the part of the owner). This can give you piece of mind, and allows you to take risks in starting your business or expanding it!

The second advantage of using a corporation for your business is from a tax perspective. Corporations are initially taxed at a lower rate than other people, which gives you more after tax money to grow your business. It also allows you to “control” your personal income. As any small business owner can attest, earnings can vary a lot from year to year. By running your business through a corporation, there are many ways that you can control how much of your business’s earnings go come to you each year. This allows you have a more stable income, which reduces the high tax cost from a unusually good year.

To properly enjoy the benefits of a corporation, it is important that it is done right! Speak to one of our lawyers to ensure that you are properly getting the legal protection from your Corporation, and speak to an accountant to ensure that you can make use of the tax benefits.