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If you
are interested to get a limited liability company protecting you from the personal
liability for your business, you should consider incorporation. Please
read information about other benefits
of incorporating.
Our
highly
experienced and
reputable company offers the full set of incorporation services for
federal and Ontario corporations. You should visit our page explaining differences
between federal incorporation and Ontario incorporation. This
information could help you to find the most suitable solution for your business.
As
an official
Search House registered with Industry Canada we also prepare official name search
reports (NUANS) required for incorporation of federal and provincial
corporations.
If
you are not ready for incorporation yet, you could start from registering
of Sole Proprietorship or Partnership,
which is the most inexpensive way to register your business in Ontario. However, please be
aware this form of registration doesn't provide you with limited
liability for your business. You will be fully responsible for
your
business debts and obligations by your personal assets.
Benefits
of Incorporation
Separate
Legal Entity
A corporation has the same rights and obligations under Canadian law as a
natural person. A corporation can acquire assets, go into debt, enter into
contracts, sue or be sued, and even in some situations be found guilty of
committing a crime.
Limited
Liability
Shareholders of a company are not liable for the company's debts. If the
company goes bankrupt, then a shareholder will not lose more than his or
her investment (unless the shareholder has provided personal guarantees
for the company's debts). A creditor cannot sue shareholders for
liabilities incurred by the corporation, even though shareholders are
owners of the corporation.
Lower
Corporate Tax Rates
A corporation is taxed separately from its owners and generally at a lower
tax rate. For example, active private companies in Ontario pay a combined
flat tax of less than half that of an individual in the highest tax
bracket on the first $400,000 of taxable income.
Greater
Access to Capital
Raising capital is often easier for corporations than for other forms of
business. For example, corporations are entitled to issue bonds or share
certificates to those who invest money in the company. Other forms of
business must rely solely on their own money and loans for capital.
Corporations
often are able to borrow capital at a much lower rate than other forms of
business. This is because financial institutions and other sources of
financing perceive loans to corporations as being less risky investments.
Continuous
Existence
Unlike a partnership or sole proprietorship, a corporation does not cease
to exist upon the death of its owners. Ownership would transfer to the
shareholders' heirs, and the corporation would still live on. This
assurance of continuous existence gives a business greater stability,
allowing it to carry out planning over a longer term and to obtain more
favourable financing terms.
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Useful
Links
Official
Canadian Government Website
Canada
Customs and Revenue Agency
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