When you work for yourself, you have to decide whether to register as a sole proprietorship or incorporate your business. Many factors play into making your decision including your annual income and long-term business plans. By incorporating, you may be able to keep more of your hard-earned income where it belongs: in your pocket. Often, incorporating your business in Canada allows you to defer taxes and decrease the proportion of income you pay in taxes.
As you evaluate whether to incorporate, it’s important to think about more than just numbers. Some questions you might want to consider when making the decision include:
- What amount of personal income do you receive from other sources (i.e., not your business)?
- What are your lifestyle spending patterns and habits?
- Do you have a personal commitment to contracting?
As everyone’s situation is unique and each province has its own tax laws and rates, nothing can replace sound advice from a reputable Chartered Professional Accountant. However, there are numerous well-known advantages to incorporating your business.
For more information about incorporating in your jurisdiction, check out the links below:
- Incorporating a business in Canada (Federal Incorporation)
- Incorporating a business in British Columbia
- Incorporating a business in Alberta
- Incorporating a business in Manitoba
- Incorporating a business in Ontario
- Incorporating a business in Quebec
- Register for a GST/HST Account
- Register your business in Canada
Jarvis is a leading IT consulting firm headquartered in Canada that provides total talent solutions with ongoing partnerships across North America’s top financial institutions, cutting-edge startups, and major technology companies.
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