Posted on: 07-05-07 11:19:53
Business Gurus, what do you think? Which one is more favorable, incorporated or sole proprietorship? Taxes, Liability wise and any other factors wise?
as far as my knowledge goes, if you expect income to be substantial then incorporation is better. You can be employee of the corporation and pay yourself a salary. You will be taxed only on this salary. You also have to pay corporate taxes.
I think the best way would be to estimate your income and prepare two scenarios one Sole proprietorship and corporate and figure out which will suit you best.
Quote:
Originally posted by lana2005
as far as my knowledge goes, if you expect income to be substantial then incorporation is better. You can be employee of the corporation and pay yourself a salary. You will be taxed only on this salary. You also have to pay corporate taxes.
I think the best way would be to estimate your income and prepare two scenarios one Sole proprietorship and corporate and figure out which will suit you best.
Good suggestion. There are so many other factors to consider and the decision depends upon individual situation. While deciding, the nature of business, future plans, no. of employees, turn over, profitability, financial needs etc etc have to consider.
-----------------------------------------------------------------
Live and Let Live. Together we can make a difference.
DP JAIN, CPA, CGA, CPA (US), CA(I), LL.B.(I)
416-305-0080
(Loans, Mortgage, Tax, Accounting, Investments)
