There are many advantages to incorporating your small business, but limited liability is one of the biggest advantages. When you have sole proprietorship to the company all the liability of the company is on the owner. When incorporating the business, your only liability is to however much you invest in the company. With sole proprietorship, all of your personal belongings, such as car and home, can be turned over to help pay the debt of the business. As a shareholder in the business, you have no responsibility whatsoever for the debts of the business, that is of course unless you give a guarantee.
Limited personal liability is the advantage of incorporating your business.
to raise more money easily
Incorporating a business is an important step to consider and should be ventured in to only after much thought and research. In Canada you can find a lot of information about incorporation through Corporations Canada who can walk you through the steps and paperwork that must be filed.
You could check your local library for information. Try looking in the business section. You could also speak to a careers adviser and discuss the matter with them.
One could find more information about incorporating a small business on a number of websites. For instance, once could find more information about incorporating a small business from the Small Business Administration website, Incorporate, and My Corporation.
There are many tax breaks you can get by incorporating a small business. The government also has many programs that will help small incorporated businesses.
Depending on what kind of business you are incorporating if you aren't real knowledgeable about what you are doing or what you want to accomplish you should hire a financial adviser.
There are many advantages to incorporating your small business, but limited liability is one of the biggest advantages. When you have sole proprietorship to the company all the liability of the company is on the owner. When incorporating the business, your only liability is to however much you invest in the company. With sole proprietorship, all of your personal belongings, such as car and home, can be turned over to help pay the debt of the business. As a shareholder in the business, you have no responsibility whatsoever for the debts of the business, that is of course unless you give a guarantee.
Limited personal liability is the advantage of incorporating your business.
Yes, incorporating a business needs a federal tax ID, so that they can ensure you are getting taxed properly and paying all of your taxes within the right time amount and regularly.
to raise more money easily
Incorporating a business is an important step to consider and should be ventured in to only after much thought and research. In Canada you can find a lot of information about incorporation through Corporations Canada who can walk you through the steps and paperwork that must be filed.
To learn more take a look at SBA's Small Business Help guide to Business Incorporation or publish your question on the Small Business Administration Community Forums.
An attorney is not necessary for incorporating, but I highly recommend that anyone interested in incorporating at least consult an attorney prior to incorporating. Also, when setting up a business, consider forming a limited liability corporation. Once again, you should consult an attorney.
MASTER BUDGET
The single largest advantage of incorporating a business -- the reason most companies do it -- is limited liability. Limited liability is a critical business advantage in today's litigious world. If you do not incorporate and your business is sued you can be held liable for all damages. The claimants can take your personal assets, e.g. your home and your car, even if they are completely unrelated to the business. If you are incorporated (and it holds up in court, i.e. the lawyers don't "pierce your corporate veil") then only the assets of the business can be seized.