What’s the importance of incorporating the business? I recently heard that incorporating our business will help to get many tax benefits. My friend had also incorporated his business with the help of an online business incorporation in Ontario. Is this all about tax benefits?
Hi @peter2b1 and welcome to the forum.
I presume you’re talking about a Canadian business, since you mentioned Ontario. I imagine the benefits will vary from country to country, so there’s no point in me talking about UK incorporations, for example.
Did you not ask your friend to explain the benefits, and why he decided to incorporate?
Like TechnoBear says, a lot will depend on the country you’re talking about, as the protections will be different. In the US, it’s mostly about seperating personal property from corporate property for taxes and liability for lawsuits and such.
In Canada, it is probably a good idea. One. the costs tend not to be too great and annual filing can be done cheaply / easily online. Two. you can separate your personal and business income. Three - most importatly, it protects you from personal lawsuits (99% of the time) because of corporate problems - i.e. your software does not work, your site gets hacked etc.
You don’t want your client’s coming after you or your house because they lost money due to something you built.
Just think of it as personal protection for the most part.
As you grow, it will become more important for a host of other tax / legal perspectives.
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