This is a question we frequently get asked and there are some critical items to consider with one of the most important being creditor protection against personal assets. If you are operating a business that has potential for law suits then it is likely in your favour to be incorporated!
If you are currently operating as a sole proprietor and wish to incorporate then it is imperative that you understand the differences between the two and should set up a meeting to discuss them.
The most commonly reviewed topics are how you get paid as an owner. Since the corporation owns the cash in the bank there are typically 3 ways to get it out of the corporation and into your pocket. They include paying yourself as an employee, taking dividends or withdrawals from your shareholder account. All of these have separate tax implications so it is imperative to know these upfront or it can create a tax nightmare for future years.
Please review our September issue of the SmallBiz Builder for additional points.