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Sole proprietor or corporation?
A plain-language introduction to the two structures and the questions to ask before deciding.
Sole proprietorship
The simplest way to start. You and the business are the same for tax purposes, and business income goes on your personal return.
- Low cost and easy to set up
- Simple bookkeeping
- You're personally responsible for business debts
Corporation
A separate legal entity that files its own tax return. It can offer tax deferral and liability protection, with more paperwork.
- Separate corporate tax return (T2)
- Potential tax deferral on income you leave in the company
- More setup cost and annual filings
Questions to ask yourself
There's no one right answer. These questions help point the way:
- How much profit do you expect?
- Will you need all of it to live on?
- How much risk does the business carry?
- Do you plan to hire or bring in partners?
Talk it through
A short conversation can save a lot of time later. Book an appointment to review your options.
This guide is general information, not advice for your situation. Contact us to talk it through.