ANNOUNCER: I’m with Faisal Nassim from Cohen Highley Lawyers. What advantages does incorporation offer to anyone opening a business?
FAISAL: There are many, biggest being it refinances your liability. Since incorporation makes your business a separate legal entity liable for its own debts and obligations and not you personally, this means that your personal assets are protected from lawsuits or debts incurred by the business unless you personally guarantee them or co sign any documents in addition to your corporation.
ANNOUNCER: What else?
FAISAL: Incorporation can offer substantial tax savings and the ability to access lower corporate tax rates as opposed to sole proprietorship. We work with clients’ accountants on a routine basis to achieve this tax optimization.
ANNOUNCER: Any other advantages?
FAISAL: Corporations are more likely to secure general purpose acquisition or working capital loans which facilitates ramping up of the business. Incorporating can also make it easier to raise capital through the sale of shares to select investors and as a vehicle for future estate planning purposes.
