It depends on your personal preferences, your business’s needs, and several factors. If you choose sole proprietorship, you can save on costs when setting up your business. In terms of liability, incorporating your business would mean you will only have limited liability, unlike in sole proprietorships, wherein you will assume all liability. There are also tax concerns — with sole proprietorships, you get less flexibility when it comes to income taxes. On the other hand, corporations typically enjoy lower income tax rates.