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Thinking of Incorporating? Here's What You Need to Know! #shorts

14 Jan 2025 · 1 min

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A short YouTube video (January 14, 2025) in which Bob Gauvreau explains basic implications of incorporating a small business in Canada: incorporation creates a new legal entity that requires transferring operations from a sole proprietorship/partnership, separate corporate income tax filings, and preparation of financial statements including assets and liabilities.

Chapters

The additional requirements that would be involved. If you decide to incorporate your business, what you're going to do is you're going to start this corporation and we're going to transfer the operations from your sole proprietorship or partnership into this corporation. The corporation is a separate legal entity. As soon as you incorporate it's the birth certificate of a new entity that has the same obligations as us. As individuals we have to claim our income and we have to report it. As a proprietor you include your business income or statement of operations from business on your personal tax return. With a corporation you also have to file a separate income tax filing related to that entity because it has income and expenses. As a corporation there's a separate filing and not only is there a separate filing we have to report our revenue expenses but we also have to list our assets and liabilities. With a corporation in Canada it's highly advisable that when you file a corporate tax return you have financial statements that are completed.