Should I remain a Sole-Proprietor? Or should I Incorporate?
There are two reasons to incorporate. One is liability – the other is tax advantage. Regarding liability, if your business puts you at risk that your actions may cause damage to property or injury to a person – then there may be a chance that you could be sued for damages; and as a sole-proprietor your personal assets, cash, home and vehicle would be at risk. With respect to tax advantage, if your business is achieving sales/revenues above $50,000 yearly then, our view is that you’re no longer operating a “casual” or “hobby” business and need to elevate your business posture. For example, in Alberta, you would only be taxed on the corporate business’ gross profits at the 14% tax rate (which is far better than being taxed at the personal tax rate of 15% or 22%).