Own your own business and wondering whether it’s time to incorporate? It can be a difficult decision to make and the path is not always clear. Although there are definitely some benefits to incorporating, the benefits are really dependent on your current situation, your goals, and aspirations for the future of your business and a few other details. Here’s what you should know if you are considering incorporating your Muskoka-based business.
The Cons
The first thing you’ll want to consider before you decide to go ahead and incorporate is the cost that is involved. The costs involved in incorporating a business vary depending on whether you decide to go with provincial incorporation or federal incorporation. When seeking to incorporate, it’s also a good idea to seek professional advice and guidance of a corporate lawyer who can guide you through the process, which will add additional costs.
Although your corporate lawyer can help with a lot of the paperwork you’ll need to complete, there are still quite a few forms you’ll need to fill out in order to complete the incorporation process. Once you’re incorporated, it’s important to be aware of the fact that corporations have stricter regulations that they need to follow – which means more complex legal and administrative tasks will be required. This could mean you’ll need to hire someone to help with this.
The Pros
Although there may be more paperwork and additional costs, there are, of course, many benefits to incorporating. Incorporation provides some flexibility when it comes to taxes and how you pay yourself. If you are the owner of an incorporated company, you have the ability to pay yourself via salary, dividends, bonuses or a combination of all three. Additionally, if you are able to leave money in your business, you could also benefit in the form of a break on the amount of personal taxes you’ll need to pay.
Protecting yourself from liability is another major benefit of incorporating your business. When you become a corporation, you basically are a separate individual from your company. This means that if you happen to encounter any legal, debt or financial issues, your personal assets remain protected and separate. This is not the case when your business is set up as sole proprietor.
If your company is rapidly expanding, or you plan on rapidly expanding in the future, it may be a good idea to consider incorporation now. When considering incorporation, it’s important to have all the information and follow the proper procedures. At Ares Law, we specialize in providing corporate law services and guidance to a wide range of business and companies in Parry Sound. We can help you figure out whether incorporation is really the right step for your business and guide you through the process. Connect with us today at 1-705-746-6444 and let’s get started!
