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[OP]
Sr. Member
Sep 29, 2012
726 posts
48 upvotes
Toronto

Registering small business ?

Hello

I was thinking of registering business. Currently I run a up and sell e-commerce store. And I sales are going over $20k YTD .
I was thinking of registering under corporations, so maybe in future I can open another business if I were to.

Any suggestions or feedback of how I should go about it ?

Thank you
8 replies
Deal Addict
Feb 5, 2009
2808 posts
928 upvotes
Newmarket
sndeal wrote: Hello

I was thinking of registering business. Currently I run a up and sell e-commerce store. And I sales are going over $20k YTD .
I was thinking of registering under corporations, so maybe in future I can open another business if I were to.

Any suggestions or feedback of how I should go about it ?

Thank you
Why do you think corporation is the way to go for you, you can have many businesses, incorporated or not.
[OP]
Sr. Member
Sep 29, 2012
726 posts
48 upvotes
Toronto
One of my family uncle told me it’s better to do incorporate when Registering business. He said you can open multiple business under corporations. I am not sure that’s why I am here to see other people opinions. Also want to start some sort of food delivery business in near future as well.
Deal Addict
Feb 5, 2009
2808 posts
928 upvotes
Newmarket
Ok, forget what your uncle told you.
With 50K in annual sales it will make zero sense to incorporate in 99% of cases. Running a corporation costs money (accounting, legal fees) and not worth it unless there is enough benefits to offset it.
There will be no tax saving or deferral unless your profit margins are very high, and you leave all the profits in the corporation (meaning you don't use funds for personal reasons).
For small business like this you are very likely to be sole proprietor, if you grow enough to justify incorporating it can be done when it makes sense.
Jr. Member
User avatar
Nov 1, 2007
155 posts
25 upvotes
Toronto
Homerhomer wrote: Ok, forget what your uncle told you.
With 50K in annual sales it will make zero sense to incorporate in 99% of cases. Running a corporation costs money (accounting, legal fees) and not worth it unless there is enough benefits to offset it.
There will be no tax saving or deferral unless your profit margins are very high, and you leave all the profits in the corporation (meaning you don't use funds for personal reasons).
For small business like this you are very likely to be sole proprietor, if you grow enough to justify incorporating it can be done when it makes sense.
He's correct.
Professional Accountant by Profession, Accountant by Trade. Business Entrepreneur every single day!
Deal Guru
User avatar
Mar 23, 2008
11901 posts
8149 upvotes
Edmonton
Keep in mind you better register for an GST/HST number, as you have to start remitting taxes once you hit $30k in revenue (not profit).

C
[OP]
Sr. Member
Sep 29, 2012
726 posts
48 upvotes
Toronto
Homerhomer wrote: Ok, forget what your uncle told you.
With 50K in annual sales it will make zero sense to incorporate in 99% of cases. Running a corporation costs money (accounting, legal fees) and not worth it unless there is enough benefits to offset it.
There will be no tax saving or deferral unless your profit margins are very high, and you leave all the profits in the corporation (meaning you don't use funds for personal reasons).
For small business like this you are very likely to be sole proprietor, if you grow enough to justify incorporating it can be done when it makes sense.
What if I am opening catering or food business ? Would sole proprietor will be better then corporations? I would be using funds for personal when I do start food business .

How much does it cost to register a business ?
Corporations is expensive $1.2 k
Deal Guru
User avatar
Mar 23, 2008
11901 posts
8149 upvotes
Edmonton
sndeal wrote: What if I am opening catering or food business ? Would sole proprietor will be better then corporations? I would be using funds for personal when I do start food business .

How much does it cost to register a business ?
Corporations is expensive $1.2 k
Keep in mind that there’s personal protection gained by incorporating. As in, if you get sued because you made everyone at a wedding sick, you may wish you had incorporated.

And here in Alberta at least, it’s only around $500 to incorporate. But your cost for doing your accounting will jump up.

C
Deal Addict
Feb 5, 2009
2808 posts
928 upvotes
Newmarket
CNeufeld wrote: Keep in mind that there’s personal protection gained by incorporating. As in, if you get sued because you made everyone at a wedding sick, you may wish you had incorporated.
That is a fair point, but he can protect himself with liability insurance which he should have regardless if he is incorporated or not.

From tax/accounting perspective it makes no sense at all to incorporate in his case.

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