Business Financial Literacy
Receive a full year of Business Financial Literacy with Debi Peverill. Enroll today on a month-to-month basis or receive a special discount when you pay for your entire year in advance.
$12.77 per month (recurring subscription)
$110 annually (best deal)
Is it Time to Incorporate Your Business?
The decision about which form your business should take is one of the most important decisions made as a business owner. Incorporate too early and you might not be able to deduct losses you have incurred, incorporate too late and you could end up paying too much tax. There are also liability and cost issues.
Advantages of sole proprietorship
Easy to set up
Inexpensive to register the business
Easy to understand the business form
Disadvantages of sole proprietorship
No separation of business from person who runs it
No transfer of liability from the proprietor to the business
Higher tax rate than corporation on funds left in the business
Paying tax on funds which were not received by proprietor
Disadvantages of corporation
Harder to set up
Costs $1500 or so the first year to get incorporated
Harder to understand the business form
Losses may be trapped in the corporation
Will have to file corporate and personal income tax returns
Advantages of corporation
Separation of business from person who owns it
Possible transfer of some liabilities from the owner to the corporation
Lower tax rate on funds left in the corporation
Unlimited life of corporation
Enhanced capital gain exemption
Advantages of partnership
Easy to set up
Inexpensive to register the business
Losses can be deducted from other personal income
Disadvantages of partnership
No separation of business from the partners who runs it
No transfer of liability from the partner to the business
Higher tax rate than corporation on funds left in the business
Paying tax on funds which were not received by partner
Joint and several liability for the partnership’s debts
For a full discussion on this topic join our membership site….
$12.77 per month (recurring subscription)
$110 annually (best deal)
