Advantages and Disadvantages of Incorporating
Advantages and Disadvantages of Incorporating
Advantages of Incorporating
- Limited liability
- Small Business deduction leading to lower tax rates (see our corporate taxes payable notes)
- Income splitting opportunities
- Reasonable Salary to wife
- Reasonable Salary to Kids and other family members
- Access to lifetime capital gains exemption (see our QSBC Notes)
- Flexibility – re year-end selection
- Facilitate estate planning (see estate freeze notes)
- Owner-manager compensation
- Dividends vs. Salary (see Dividends vs. Salary Notes)
- Capital Dividends
- Year-End Bonuses
- Dividends vs. Salary (see Dividends vs. Salary Notes)
Disadvantages of Incorporating
- No personal credits (see personal tax credits notes)
- Inability to claim corporate losses against other sources of income
- Cost of initial corporation