An informed partnership is inexpensive to start. It is relatively easy to comply with regulations. Contract consulting firms do not deduct any CPP or EI premiums. You are eligible to deduct business expenses. Disadvantages Owners are subject to unlimited liability.
All income is subject to personal tax rates.
Each individual partner is responsible for the business actions and debts of every other partner. A formal partnership agreement is a complicated legal document, which makes a formal partnership a very expensive business structure to create and maintain in terms of the professional assistance needed by the business owners. An informal partnership is inherently unstable, as the rights and obligations of each partner are not clearly defined. The corporation is a legal entity separate from the individual owner of that corporation. As an owner or shareholder of a corporation, you are usually liable only for the money invested in the corporation.