Sole Proprietorship vs Corporation in Canada

A sole proprietorship is not a separate taxpayer. The owner reports net business income on the personal T1. A corporation is a separate person for tax. It files a T2, and the owner reports salary or dividends on a personal return. That is the comparison Kennedy Tax & Accounting Inc. uses when someone asks which to choose.

Side by side

	Sole proprietorship	Corporation
Who files	The owner, on the T1	The company, on a T2
Liability	The owner’s own	Limited to the company, with exceptions
Tax	Personal rates on the net income	Corporate rates on the company’s income
Admin	A master business licence if you register a name	Articles, annual return, books, T2
Our fee	Quoted, or $49.99 + HST if it is only a simple personal return	Quoted

Personal and corporate rates

Personal rates and corporate rates are different tools. The combined small-business rate and the general rate are on the corporate rates page. Incorporating does not, by itself, lower the tax on money you spend personally. The firm will say which structure matches the file. It will not promise a saving.

Work with the Scarborough office

The only office is in Scarborough, near Kennedy Station. You can visit or send the documents. English, Bengali and Tamil are spoken. Manoranjan (Mano) Talukder, CPA, leads the firm, which has worked since 2010. Personal returns start at $49.99 + HST. Other files are quoted first.