Should You Incorporate? Sole Proprietor vs. Corporation in Ontario
“Should I incorporate?” is one of the most common questions we get. The honest answer: it depends — and here’s how to tell.
The real advantages of incorporating
Incorporation can offer tax deferral (leaving profit in the company at low corporate rates), limited liability (separating business risk from personal assets), and planning tools like income splitting and a future sale. The small business deduction makes retained profits cheaper to hold.
When it’s probably not worth it yet
If you take out almost everything the business earns to live on, your profit is modest, or you’re just starting, incorporation mostly adds accounting and filing costs for little benefit. There’s a crossover point — usually when you’re consistently earning more than you need personally.
The bottom line
Don’t incorporate because someone told you to. Run the numbers for your actual situation. We’ll tell you honestly when it makes sense — and if you do, we handle the whole thing.
Related: Salary vs. dividends · Our incorporation service →
FAQ
When is it worth incorporating? Usually once you consistently earn more than you draw personally and want tax deferral or liability protection.
How much does it cost to incorporate in Ontario? Our set-up is a flat fee plus government fees, including a consult — book to confirm.
Does incorporating protect my personal assets? It creates a separate legal entity, which generally limits personal liability.
Can I incorporate myself? You can, but structure and CRA set-up mistakes are costly — we do it right the first time.
