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Small Business Incorporation in Canada May Be a Smarter Choice—Learn Why!

Incorporating a small business offers a ton of benefits. In fact, it’s considered one of the smartest business decisions for up-and-coming companies that are looking to maximize profit and ensure long-term growth.

As a small business in Canada, you should have a razor-sharp focus on making informed and beneficial decisions for continued business improvement. A corporation is a great structure for your business, provided that you have a good grasp on its benefits.

In this blog, we’ll walk you through three reasons why small business incorporation is a smart choice for Canadian businesses. Continue reading.


1. Added Layer of Security


Security is extremely important for small businesses that are more vulnerable to attacks. By operating your business through a corporation, you gain an extra layer of protection against personal liability.

In essence, it becomes increasingly challenging for an individual or company to dive into your personal assets if, for instance, you fall victim to a potential debt default.

On the contrary, sole proprietors can easily get their personal assets seized.

Once you become a shareholder in a corporation, you will not be held accountable for your corporation’s debts, so long as you haven’t provided a personal guarantee. Avoid making that claim.


2. Continuity

business continuity and growth

Every small business strives to successfully grow, flourish, and succeed for years, decades, and potentially centuries. By incorporating your business, you can reap the benefits of continuity.

Corporations continue to exist regardless of the death of a shareholder. Even if the ownership of the business evolves, or a shareholder potentially leaves, you can rest assured that the corporation will go on.

This is one of the most advantageous benefits of incorporating your business.

Recommended Read: The Canadian Fiscal Year: How Do You Choose Your Year-End Date?

3. Tax and Income Benefits

Corporations often enjoy a lower tax rate. Consequently, you can save and defer taxes. Your business may also qualify for federal SBD (small business deduction).

In addition, you can benefit from the LCGE (lifetime capital gains exemption), which allows owners to sell the Shares of Qualified Small Business Corporation and enjoy an impressive gain (sans tax) upon selling.

At Duggal Professional Corporation, we’re your go-to accounting, tax, and business advisors in Edmonton.

Need a hand? Reach out to our experts for year-end financial reporting, tax compliance and filing, payroll, business consultancy and reporting, bookkeeping and GST filing, and start-up requirements and planning services. By covering all the bases, we help your business succeed in the long run.

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