As a business grows, things sometimes become more complicated and questions arise about how best to organize the business, as well as questions about protection from creditors, and reduced taxation. Incorporating your business can sometimes help to resolve these issues. But with that comes greater complexity, increased need for tighter accounting controls (and, unfortunately, increased accounting fees).
The corporation becomes a separate person for legal and taxation purposes. Separate tax returns must be prepared for the owners (shareholders) and for the business (the corporation). Even the software to prepare the corporate returns is more expensive and complex than for personal income tax. And you still need to file a personal return for any salary or dividends you take out of the corporation, as well as income from any other personal sources, such as your pensions, employment, personally owned rental properties, etc. Careful separation of personal and corporate assets and activities becomes essential.
Furthermore, losses in the corporation can not be deducted from your personal income tax return, but only from past or future years' income in the corporation, because, again, the corporation is a separate legal person and taxpayer.
As to tax savings, there can often be short-term savings; but in the long run, taxes sometimes prove to be similar to before incorporation. Income not paid out to owners (retained in inventory or paying down debt) can attract lower rates of taxation, but even then, you might have some additional taxes when the amounts are paid out later. Thoughtful planning is needed to minimize and defer taxes.
So, it pays to take time and discuss these matters with me, and perhaps with a lawyer, before deciding on incorporation. I can review your particular circumstances and help you to decide which direction will best serve your own needs. And remember the 'kiss' principle -- Keep It Safe and Simple.
Call me at (905) 432-2468 to arrange a review of your needs.