Businesses who choose to incorporate acquire many benefits. Although there are a variety of business structures that you can choose from, understanding these benefits can help you decide if incorporation is right for you.
Incorporating your business can provide tax, liability, financing, and other benefits. The following will teach all about the benefits of incorporating your business so that you implement the right structure that positions you for lasting success.
Incorporation and limited liability
Liability is an important aspect to consider when running a business. A corporation may limit the liability from the individuals who own the corporation. It may protect the individuals from being responsible for any debts that the corporation incurs.
Corporations create separate legal entities
Incorporating a company is a separate entity from those who incorporate the business. The corporation functions as its own entity and may obtain its own financing and assets. It may borrow and lend money.
Incorporating your business allows you to create a new legal entity that is separate from the company’s members and shareholders. This provides further protection and is one of the biggest benefits of incorporation.
Most businesses seek to leverage as many tax benefits as they can. Incorporation allows your business to be taxed at a low rate when compared to the tax rate for individuals. It separates the tax burden of shareholders from those of the corporation.
Incorporation and financing
Corporations often receive better access to the financing needed to grow the business. Lower interest rates may be granted to businesses that are incorporated, as banks and other financial institutions view these loans as having a lower risk when compared to others.
Incorporating your business
There are a number of steps required to incorporate your business. In Canada, businesses can be Provincially or Federally incorporated.
We provide businesses with the best options available to meet their needs so that they can achieve the benefits of incorporation.
Businesses must submit the proper applications along with their business name and the legal names of its directors. A certificate of incorporation is given to the business, allowing it to operate as a separate legal entity.
Federal incorporation is an option for businesses that plan to operate in more than one Province. Federal incorporation can also provide your business with a higher level of credibility within your industry.
Ontario incorporation is typically completed when the business will exist in the Province of Ontario solely. This does not limit the access to clients or customers around the world.
Tax Filings must be completed with CRA each year by corporations, which makes it essential that you keep organized records of this information when operating your business.
We recommend that you have a full understanding of all of the requirements prior to incorporating your business in order to avoid any unwanted issues or delays.
These are some of the most important benefits of incorporation. Understanding the requirements of incorporation helps your business achieve the financial, legal, and tax benefits that help you reach your long-term goals.
Speak With One of Our Experts today to learn more about incorporating your business in Ontario.
Laura Harvey is an entrepreneur herself as the owner of Ontario Business Central Inc. Her passion has always been about supporting the entrepreneurial spirit and advancement within Canada.
Laura authors in-depth blogs for Ontario Business Central assisting entrepreneurs and business owners to start, manage and grow their businesses. She has almost 30 years of expertise as a corporate specialist and 25 years of being an entrepreneur. Laura has the unique position of supporting a community that she also belongs to. She walks the walk right along with you.
You can find Laura on Linkedin and Twitter.