Three Reasons to Incorporate in Manitoba
Are you a Manitoba business that hasn’t incorporated? Perhaps you’re a freelancer that, up to this point, hasn’t considered themselves as an “independent business”.
But unless you spend every last dollar that you make every month, incorporating can save you on your taxes. Additionally, it’s good for your legal position, your credibility, and at least in Manitoba, it doesn’t cost that much.
You don’t have to be a big corporation to incorporate.
Save on Your Manitoba (and Federal) Taxes by Incorporating
In Canada and Manitoba, corporations are generally taxed at a much lower rate than are individuals. Incorporating also offers you the opportunity to take profits in dividends as opposed to income, which are also taxed differently.
If you’re in Manitoba and your business makes less than $500,000 in income, you’re only taxed at the 9% that the Feds take. If you go over $500,000 however, the rate increases from 0 to 12% in Manitoba and from 9 to 15% at the federal level.
One more way incorporating can save you on your taxes is through a Private Health Services Plan (PHSP). A PHSP, like the one from Corporate Care, allows you to deduct family medical expenses (both yours and your employees, if they’re covered by you). This means you’d pay less in taxes and you and your employees would have medical expenses provided for. That’s a win-win.
Protect Yourself Under Manitoba (and Federal) Law by Incorporating
Your corporation is a separate entity from yourself. This means you can’t be held personally liable for debts or lawsuits associated with the business, unless you have given a personal guarantee. When you’re incorporated, the only piece of you that is liable is the level of ownership or equity you’ve chosen to include in the business itself.
Incorporating also allows you to keep you and your family’s reputation separate (to some degree). This can be useful if your business operates in a political or controversial field or one that could potentially become so.
In Manitoba, It’s Actually Pretty Affordable
For the benefits you receive and the hard-costs associated with it, incorporating is a pretty good deal. It’s also not hard. The Manitoba Corporations Office will provide you with online services to do name registration and incorporation. The online filing fee is $45 and the fee for incorporation is $350. You can also have a lawyer help you set up your corporation, for which the fees vary.
Is incorporating worth it? If you plan to make a living off of your business, the answer is almost undoubtedly “yes”.
Save On Your
Corporate Taxes Today
Already incorporated? Perhaps you’re just about to? We average $1750 in tax savings for our clients annually.