Find out which type of business structure works best for you.
Once your business is generating revenue, you may need to register for, collect, and remit the federal goods and services tax (GST) or, in some provinces (like Ontario), the harmonized sales tax (HST).
Your business must register for a GST/HST account and charge GST/HST if you sell taxable supplies in Canada and are generating over $30,000 in revenue.
- You make all the decisionsYou make all the decisions
- Utilizes personal tax credits
- All the profits are yours
- Simple tax structure and benefits
- Income is taxed on personal tax rate (higher than corporate rate)
- Losses can be applied to other sources of income to generate funds
- Business lifespan is the same as the owner’s (continuity concern)
- You are personally responsible for all the business’ financial and legal liabilities (unlimited liability)
- You are responsible for protecting your business name
- Low cost to set up and maintain
- The business is a separate legal entity from its owner The business is a separate legal entity from its owner
- Can be owned by one or more people
- Since corporations are separate legal entities, owners are not personally liable for the businesses financial and legal liabilities (limited liability)
- Decisions are made by the corporation’s directors
- The business has an unlimited life span
- Lower corporate tax rate
- Easier to raise money and/or grow your company
- Potential to qualify for certain small business tax deductions and other tax benefits
- Limited business name protection
- Expensive to set up and maintain
To help you decide which business structure is best for your business, please give us a call or book a free consultation.