7 Reasons to Incorporate Your Business – Corporate Lawyer Ottawa

Francis Lawyers

Advantages to Incorporating Your Business in Ottawa

Risk Management

A corporation is a separate legal entity distinct from its shareholders. A shareholder’s liability is limited to the amount of his investment. If your business activity carries any risk of substantial loss, incorporating will protect your personal wealth and reputation.

Tax Advantages

Small businesses operate in a favorable tax climate in Ontario. Tax rates are very low for the first $300,000 of business income.

Income Splitting

By allocating shares in the corporation to your spouse and/or children, you can lower your personal income and therefore pay less tax. On the sale of the business, capital gains can be divided and tax lessened by the same mechanism.

Attracting Investors

Due to limited liability, a corporation is an attractive investment opportunity.

Perpetual Existence

A corporation has a continued life despite the death or removal of a shareholder. Estate planning benefits may result from the perpetual existence of a corporation.

Government Grants

Some business grants are available only to corporations.

Profit Sharing for Employees

Profit sharing provides an incentive for employees to provide maximum performance for the benefit of all.