Incorporating a new company in Canada has many advantages including
Legal advantages and Limited liability
A corporation is a separate entity with its own legal personality. This means that it is the business that is responsible for debts and obligations. There are some exceptions in which directors may be held liable for some of the corporation’s obligations.
Continuity
Because a corporation is a separate legal entity, it continues to exist even when its founder dies. It can also be sold to new owners.
Tax advantages and Lower tax rates
Corporations have to pay taxes on the net income (profits) they generate through their business activities. Rates may vary, but they are often lower than personal income tax rates for employees or self-employed workers.
Tax deferral for shareholders
Only earnings distributed by the company in the form of salaries and dividends are taxable. Shareholders and directors are not subject to tax as long as the earnings are retained within the company.
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