Is it Better to Incorporate a Business?

As incorporation lawyers, we often get asked whether it’s better to incorporate a business or not. If you’re grappling with this question, you’ve come to the right place. Below, we have put together an FAQ to guide you through the process and help you make an informed decision.

Why Should I Incorporate?

Incorporating your business can provide several advantages over alternative forms of business. These include personal liability protection, business credibility, flexible ownership, name protection, and potential tax benefits. To dive deeper, check out our detailed post on the Benefits of Incorporating.

What are the Downsides?

While incorporating can offer numerous advantages, it’s not all sunshine and rainbows. There are some drawbacks you should consider. The main drawbacks are increased paperwork and compliance costs. For a balanced perspective, read our post on the Pros and Cons of Incorporation.

Is Incorporation Suitable for All Types of Businesses?

No, incorporation may not be the best route for all businesses. Small, low-risk ventures owned by a single person may find the cost of incorporating, ongoing maintenance, and paperwork overwhelming.

There are also some limitations that can apply to potential tax benefits and liability limitations that corporations can offer. These will depend on the type of business and how it is structured. However, as your business grows, the disadvantages often become negligible compared to the benefits.

How Does Alberta Law Impact My Decision?

Under Alberta law, incorporating a business can offer you substantial protection, especially in terms of liability. The Business Corporations Act (Alberta) lays out the framework for corporate structure and governance, which you must adhere to when you incorporate.

How Does Incorporation Affect My Taxes?

In Alberta, corporate tax rates can be more favorable than personal tax rates for business income, depending on your profit levels. There may also be opportunities to save on tax by retaining income in the corporation, or by selling shares instead of assets when you decide to leave the business.

The tax implications of incorporating will depend heavily on your specific business and tax circumstances. Therefore, we strongly recommend that you consult a tax advisor familiar with Alberta tax law prior to incorporating.

Can I Incorporate Online?

Absolutely, in fact, it’s simpler than you might think.

allincorporated.ca offers a streamlined, step-by-step process to get your business incorporated without the hassle. We help you incorporate your business with the help and support of a lawyer online.

What’s My Next Step?

If you’re still on the fence, we recommend booking a consultation with an Alberta incorporation lawyer to discuss your specific circumstances and concerns.

Incorporating a business is a major decision that should be taken after careful consideration of various factors. We hope this FAQ has helped you in your journey towards making that choice.