Nearest broker: Searching for a broker nearby…
Nearest broker: 2607 Ellwood Dr SW, Edmonton, AB, T6X 0P7 Phone: 780-732-8616 10060 Jasper Ave, Edmonton, AB, T5J 3R8 Phone: 780-435-3632 , Calgary, AB Phone: 403-532-4882 322 Avenue C S, Saskatoon, SK, S7M 1N4 Phone: 639-398-4170 10325 Bonaventure Dr SE, Calgary, AB, T2J 7E4 Phone: 403-695-1050 5317 50 Ave, Taber, AB, T1G 1V3 Phone: 403-223-2377 110a McLeod Ave, Spruce Grove, AB, T7X 2H8 Phone: 780-571-1144 496 Marquis Rd, Prince Albert, SK, S6V 8B3 Phone: 306-970-8080 335 Hwy Avenue N, Picture Butte, AB, T0K 1V0 Phone: 403-732-6023 103-5020 Lac St Anne Trail S, Onoway, AB, T0E 1V0 Phone: 780-967-2282 2201 Box Springs Blvd NW, Medicine Hat, AB, T1C 0C8 Phone: 403-487-5132 550 Wt Hill Blvd S, Lethbridge, AB, T1J 4Z8 Phone: 403-394-1123 734 13 St N, Lethbridge, AB, T1H 2T1 Phone: 403-328-9114 5 St SE, High River, AB Phone: 403-652-4104 9901 103 St, Fort Saskatchewan, AB, T8L 2C8 Phone: 780-998-0881 , Edson, AB, T7E 1T6 Phone: 780-440-0075 16612 109 Ave NW, Edmonton, AB, T5P 1C2 Phone: 780-486-4488 201-4271 23 Ave NW, Edmonton, AB, T6L 5Z8 Phone: 780-466-2136 3908 97 St NW, Edmonton, AB, T6E 6N2 Phone: 780-465-6900 8170 50 St NW, Edmonton, AB, T6B 1E6 Phone: 780-469-9378 52 Ave, Drayton Valley, AB Phone: 780-621-1707 264 Midpark Way SE, Calgary, AB, T2X 1J6 Phone: 403-251-2926 1331 Macleod Trail SE, Calgary, AB, T2G 0K3 Phone: 403-278-1050 1331 Macleod Trail SE, Calgary, AB, T2G 1E1 Phone: 403-255-2252 234-7 Westwinds Crescent NE, Calgary, AB, T3J 5H2 Phone: 403-775-2100 , Calgary, AB, T3K 0S8 Phone: 403-719-9995 4632 70 St NW, Calgary, AB, T3B 2K6 Phone: 403-247-6435 5114 2 St, Boyle, AB, T0A 0M0 Phone: 780-689-3946 50 Ave, Bonnyville, AB Phone: 780-826-3147 12931 20 Ave, , AB, T0K 0E0 Phone: 403-562-2191 2903 Kingsview Blvd SE, Airdrie, AB, T4A 0C4 Phone: 403-945-8885

I’m looking at starting a business. Should I incorporate?

Business Insurance

By Joanne Lemna | July 18, 2016

Starting a business can be confusing. Do you need to get a license? Do you need to register your name? At what point should you consider incorporating?

When to Consider Incorporating: Financial Reasons

From a purely financial perspective incorporating doesn’t really make sense unless you’re earning a good income. “Typically you want to be earning enough that you can leave a portion of the income in the business at the lower tax rate,” explains Vancouver business lawyer Bruce Redekop. The idea here is to use the incorporation as your personal pension plan and build up investment assets inside of it that you can withdraw in retirement.

Remember though that while being an incorporated business can save you taxes it does have a downside. In addition to the administrative and legal costs, your corporation will not be eligible for personal tax credits that you may have been able to claim before. You also have less flexibility when handling business losses.

When to Consider Incorporating: Legal Reasons

However, there is another very good reason to incorporate and that’s to help provide you and your company legal protection. By incorporating you protect your personal assets should a client or customer take legal action against the business.

To appreciate how this works it’s important to understand your obligations and responsibilities as a business owner.

When you operate as a sole-proprietorship the buck stops with you. You are responsible for all the decisions and all the actions of your business. That means you are the person the courts will hold responsible should an accident or other situation arise. For instance, if you owned a bakery and a customer was to slip on your shop floor as a sole-proprietorship a lawsuit against the business would become a lawsuit against you. Not only would your store be on the hook but also your personal assets—such as your house car kid’s college fund and savings.

Operating as a partnership and the risks are quite similar. Not only are you personally responsible for the actions of your business but you are also responsible for the actions of each partner. So if your partner is sued or goes through a life change such as divorce their portion of the business becomes part of any legal dispute.

As an incorporation, however, your personal assets are completely protected. If your business is involved in a legal or medical suit only the business assets are up for grabs not your personal belongings.

Get A Quote From A-WIN

Get the best insurance deals and stay on budget.

Get A Quote

Life Events - It's Time to Reassess Your Insurance

Whether it’s heading off to university or deciding to start your own business,...

Download