Nexis CPA

What are the Advantages and Disadvantages of Incorporation?

Advantages: Separate Legal Entity/ Limited Liability:

Your corporation is a separate legal entity and as such, creditors or legal actions are against the corporation and its assets, not your personal assets. The shareholders of a corporation have limited liability. Please note shareholders can be legally liable for the corporation's GST/HST and payroll taxes.

Tax Advantages:

If you don't need all the corporation earnings for personal income, you can leave them in the corporation, deferring personal taxes on withdrawals and possibly enjoying a 15.0% preferred tax rate on the first $500,000 of profit in a CCPC.

Your corporation has tax flexibility from which you may personally benefit. If you sell shares in your Canadian-controlled private corporation (CCPC) capital gains will be tax – free up to $813,600.

Disadvantages:

The administration costs are more expensive with a corporation than with a partnership or a sole proprietorship. Administration costs include incorporation costs, annual financial statements, and annual corporate income tax return.

Continue reading
  1184 Hits

BUREAU

  6900 Boulevard Décarie
Suite 3490B
Montréal, QC
H3X 2T8
     

   Nous Contacter
 

PLAN D’ACCÈS À NOS BUREAUX