Is it Better to Incorporate a Business?

As incorporation lawyers, we often get asked whether it’s better to incorporate a business or not. Below, we have put together an FAQ to guide you through the process and help you make an informed decision.

Why Should I Incorporate?

Incorporating your business can provide several advantages including personal liability protection, business credibility, flexible ownership, name protection, and potential tax benefits.

What are the Downsides?

The main drawbacks are increased paperwork and compliance costs.

Is Incorporation Suitable for All Types of Businesses?

No. Small, low-risk ventures owned by a single person may find the cost, ongoing maintenance, and paperwork overwhelming. However, as your business grows, the disadvantages often become negligible compared to the benefits.

How Does Alberta Law Impact My Decision?

Under Alberta law, incorporating can offer substantial protection, especially in terms of liability. The Business Corporations Act (Alberta) lays out the framework for corporate structure and governance.

How Does Incorporation Affect My Taxes?

In Alberta, corporate tax rates can be more favorable than personal tax rates for business income. There may also be opportunities to save on tax by retaining income in the corporation, or by selling shares instead of assets when you decide to leave the business. We strongly recommend consulting a tax advisor familiar with Alberta tax law prior to incorporating.

Can I Incorporate Online?

Absolutely. allincorporated.ca offers a streamlined, step-by-step process to get your business incorporated with the help and support of a lawyer online.

What’s My Next Step?

If you’re still on the fence, we recommend booking a consultation with an Alberta incorporation lawyer to discuss your specific circumstances.