Reply To: Intro: Anthony Bullen

#2251
Erin Melnychuk
Moderator

Hi Anthony Bullen,

You might want to take a step back and really consider if incorporation right out of the gates is the right move for you. Yes, many benefits, but the structure is aimed at reducing risk, by separating you personally from any fallout associated with your business. It makes a great deal of sense when you have large contracts, employees, investors, etc. And yes, you get a lower tax rate. But that comes at a much higher price to get in place and carries a large administrative burden. For many brand new start ups, it can be overkill. Some start ups can’t avoid it, because it’s a complex model right out of the gates.

If you’ve not tested whether or not you have a good business model yet, it might not make sense to start there. You can start small, start to learn from lower risk opportunities, and do this as a sole proprietor. If you’ve validated your businesses model and know it will work, well then, it might make sense to incorporate from there.

Either way, you’re going to have to tax file. As a sole prop, yes, it’s on your personal income tax. As a corporation, you file a corporate tax return AND anything you’ve paid yourself you still need to claim on your personal income tax.

Food for thought.
e.

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