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Should I be incorporated? (4)

09-29-2014 10:17 PM #1 dean foster (AMC Alumnus)
Should I be incorporated?

Hi, I live in Canada and got to thinking that this type of business might be best to incorporate for liability purposes. For taxes I will probably pay more that way but it may be the right thing to do.
Thanks, Dean

09-29-2014 10:27 PM #2 zeno (Administrator)

You most certainly should.

It would be wise to compartmentalise business revenue/spend from your personal affairs and as you said it's sensible for liability purposes, albeit LLC's don't necessarily provide asset protection.

It also makes life easier when it comes to accounting, since the flow of cash isn't so convoluted.

That being the case, incorporating is not always economically practical when you are just starting out, especially since you may need to use personal credit/savings to fund it.

It definitely should be very early on in your roadmap though.

10-01-2014 02:38 PM #3 cmdeal (Veteran Member)

Quote Originally Posted by dean foster View Post
Hi, I live in Canada and got to thinking that this type of business might be best to incorporate for liability purposes. For taxes I will probably pay more that way but it may be the right thing to do.
Thanks, Dean
I am no expert on Canadian tax law, but I am pretty sure you can structure your operations so that your total tax liability through a limited liability entity is NOT meaningfully greater than running the business as a sole trader/sole proprietorship.

10-01-2014 07:28 PM #4 bbrock32 (Administrator)

You should def incorporate. I think Stackman regrets it a lot for not incorporating his first year and running all through personal

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