Is Your Business Growing? Why Incorporating Might Be Your Next Smart Move

Running a successful sole proprietorship in Manitoba? Congratulations! But as your business grows and profits increase, you might be wondering if it’s time to take the next step: incorporation.

Many established business owners – from tradespeople to small shop owners – reach a point where incorporation becomes not just beneficial, but financially essential.

The Tax Advantage That Changes Everything

Here’s a scenario that might sound familiar: You’re a sole proprietor earning $100,000 in business profits. Under Manitoba’s personal income tax rates, you could be paying around $30,000 in taxes, leaving you with $70,000 after tax.

Now imagine the same business incorporated. That $100,000 in profits would be taxed at Manitoba’s corporate rate of just 9%.

That’s a significant savings annually, and money you could be reinvesting in equipment, hiring employees, or simply improving your quality of life.

Real Protection for Your Personal Assets

Incorporation also creates a legal shield between your business and personal assets. Consider this real-world scenario:

You’re running a small construction business when a client is injured at your job site and sues for $500,000. As a sole proprietor, your personal savings, family home, and vehicles could all be at risk to satisfy the judgment.

If you’re incorporated, the lawsuit targets the corporation, not you personally. While your business assets might be at risk, your personal assets – your home, personal savings, and vehicles – are generally protected.

This protection is invaluable for businesses in higher-risk industries or those with significant personal assets to protect.

Credibility That Opens Doors

Incorporated businesses often enjoy enhanced credibility with clients, suppliers, and lenders. That “Inc.” or “Ltd.” after your business name signals stability and professionalism, potentially opening doors to:

• Larger contracts and business opportunities
• Better supplier relationships and credit terms
• Improved access to business financing
• Enhanced partnership opportunities

Is Incorporation Right for Your Business?

Incorporation makes the most sense when:

• Your business generates significant profits where tax savings outweigh incorporation costs
• You have personal assets you want to protect from business liabilities
• You’re looking to enhance your business credibility and growth opportunities
• You’re planning for business expansion or succession

It’s Easier Than You Think

Many business owners assume incorporation is complicated and expensive. The reality? TLR Law offers flat-fee incorporation services for just $750 (+ any government filing fees). 

You’ll receive personalized guidance on choosing the right business structure, full support with provincial or federal filing, and all essential corporate documents including your minute book, registers, and share certificates.

Take the Next Step

If your business is thriving and you’re ready to maximize tax savings while protecting your personal assets, incorporation might be your smartest next move.

Ready to explore incorporation for your growing business? Contact TLR Law at (204) 925-1900 or visit us online. We’ll help you determine if incorporation is right for your specific situation and guide you through the entire process.

Your business success deserves the protection and advantages that incorporation can provide.