OT contracting and incorporation

[Zbigniew Koziol]

On 9/25/07, Evan Leibovitch <evan-ieNeDk6JonTYtjvyW6yDsg at public.gmane.org> wrote:

> > I typically leave money in my company which is only taxed at 18%
>
> Exactly. To be more specific, dividend income is taxed lower than salary
> income because dividends are paid after the company pays its own taxes.

This suggests that incorporating makes more sense when there is
certain sufficient amount of money that can be left for the "company".
If not enough money is made to pay  "employee" than not much can be
saved.

A similar problem exists in case of "sole-proprietor" - if he does not
make enough money than he can not "spend" and later to reclaim from
tax agency.

I also had been once forced to get registered, under sole-proprietor
umbrella, because otherwise I would not get a job. By reading however
comments of Evan about CCRA I think that all that did not make really
much sense for the business owner. Neither I did benefit in any other
way than just be havying a work.

Corporation is in general more free to decide about the rules of the
game and how to spend money but maintaining it is somewhat more
costly, starting from at least a few hundreed per year.

Is in Ontario required to have a separate office to be registered as
corporation? I know that laws are different in priovinces.

zb.
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