Pros And Cons Of Incorporation

Pros Of Incorporating

• Limited liability
• Small Business deduction leading to lower tax rates
• Income splitting opportunities
• Access to lifetime capital gains exemption
• Flexibility – year-end selection
• Facilitate estate planning
• Owner-manager compensation
  1. Dividends vs. Salary
  2. Year-End Bonuses

Cons Of Incorporating

• No personal credits
• Inability to claim corporate losses against other sources of income
• Cost of initial corporation