Incorporation vs. sole proprietorship: how should you structure your business?
Incorporation vs. sole proprietorship
There are many forms of business organization. Two of the most common are the sole proprietorship and the incorporated business. Both can apply to small business. Neither one is necessarily a better form of business organization. Which one is best for you depends on your personal situation and the stage of your business. Here are some issues you should consider:
Simplicity - the sole proprietorship is a simpler business model
Tax - there could be tax benefits to incorporating your business
Cost - it usually costs more to incorporate and keep separate books
Liability - there can be greater liability exposure to the owner of a sole proprietorship
While there is no single answer to what is right for you and your business, you should be aware of the issues. While you can incorporate without the help of a professional, it is usually not advisable. Having a lawyer or accountant go over what may best in your situation could place your business on a better foundation.
Questions? Call Business Resources today at 1-888-234-2232. This service is part of your CFIB membership.