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. A corporation is always owned by the shareholders, even if the only shareholder is you. This is one of the major differences between a business operated as a corporation and one operated as s sole proprietorship.
Advantages Incorporating offers a variety of tax planning advantages.
Government assistance and tax incentives are available to Canadian corporations. The corporation can issue shareholder loans on better terms than otherwise available through financial institutions. There is considerable extra paperwork required, including meeting minutes, registers, income tax returns, etc. This includes obtaining a GST number and including that number on all invoices. Given the vast range of business rules and regulations specific to each country, state and province, it is virtually impossible to discuss them adequately in this space.