The $100k Threshold: Sole Prop to Incorporation

Once your net income clears the $80,000–$100,000 mark, operating as a sole proprietor becomes a 'tax trap'.

Operating as a sole proprietor is simple, but it eventually becomes a "tax trap." Once your net income clears the $80,000–$100,000 mark, every extra dollar is taxed at your high personal marginal rate. Incorporating creates a separate legal entity that qualifies for the small business tax rate, which is currently just 12.2% in Ontario.

Beyond the tax savings, incorporation offers a "corporate veil" that protects your personal assets from business liabilities. This legal separation is essential as you scale and take on more risk. You can register your new entity through the Ontario Business Registry or look into Federal Incorporation for broader name protection.

The Digital Edge: We don't just incorporate you; we set up your digital share registry and cloud ledger from day one. We help you run a cost-benefit analysis to ensure the tax deferral outweighs the admin fees. If you're ready to transition, let's build your business structure the right way.