There are several issues to consider when starting a business, such as incorporating, registering a business name, partnerships, GST and sales tax. There are several advantages to incorporating a company. The main reason that people incorporate is to avoid being sued personally when business dealings go bad. If your business is not incorporated, you will be sued personally. Another reason to incorporate is to reduce the amount of income tax that you have to pay.
Corporations pay a lower rate of income tax than individuals.
Also, a company can pay money to family members instead of the operator, and the persons who receive the income pay tax on it, often at lower tax rates that the operator of the business. Incorporating also makes it easier to pass the business on to family members when the owner of the company dies. Incorporating is often advantageous when there are two or more people who own the business. Incorporating allows for a more defined relationship and sharing of control of the business and of profits. Companies can be used to operate a farm, a family business or simply own a piece of property.