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There are a number of advantages to incorporating your business. Whether you are starting a new business or if you have an existing sole proprietorship or partnership arrangement, you should consider the advantages of incorporating. The advantages of incorporating include: 1. Limited Liability. The liability of the shareholders of a corporation is limited to the amount of their equity investment. As a shareholder, you are not liable for the debts and other obligations of the corporation. 2. Raising Capital & Corporate Finance. A corporation offers its owners access to a wide variety of capital and financing opportunities. Various classes of shares can be created: Voting, Non-Voting and Preferred Shares. In addition, debt instruments such as bonds and convertible debentures may be issued. These give shareholders and lenders different rights and obligations and these can be adjusted to provide investment incentives to reflect the degree of risk inherent in the investment. 3. Perpetual Existence. A corporation is considered a separate "person" or legal entity. It will exist apart from its shareholders, directors and officers and will not be affected by their death or retirement. The corporation may itself own property, assume liabilities, enter into contracts and sue or be sued. 4. Transfer of Control. Control of a corporation can be transferred or sold through the transfer of the voting shares of the corporation. 5. Tax Advantages. There are tax incentives and advantages available to corporations. These include lower income tax rates, research & development credits, government grants, etc. For example, as of January 1, 2008, the small business federal tax rate on a corporation in Canada is only 11% on the first $300,000 in income. Unlike a corporation, a sole proprietorship or business name registration does not qualify for this low tax rate. The income of the sole proprietorship or business name registration is taxable to the individual that owns it. 6. Credibility & Prestige. Incorporation gives your business credibility and prestige. In particular, federal incorporation is often considered a sign of distinction. Companies incorporated under Canadian federal law receive global recognition as Canadian companies. 7. Heightened name protection. The federal government in Canada applies very tough tests before granting a federal company the right to use a particular name. When a company's name is approved, it's protected across the country - a status second only to trade-mark protection. 8. Federal incorporation is actually cheaper and faster than incorporating in Ontario or any other Canadian province. And it is not more expensive to maintain a federal corporation than it is to maintain a provincial corporation. Please note our price guarantee current as of : If within 30 days of incorporating you find a faster process and lower price for comparable service, we will match the price.
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