What to do next
Decide how much liability protection you need
A corporation (or US LLC) is a separate legal person, so business debts and claims generally stay with the company. A sole proprietor is personally on the hook. If your business carries real risk — employees, premises, contracts, borrowing — that usually points to incorporating.
Look at the tax consequences
Tax treatment differs significantly by structure and by country, and can change what you actually take home. A lawyer working with an accountant can model the difference before you commit.
Think about the next five years
Bringing in co-founders, investors, or selling later is far simpler with a corporation and a proper shareholder agreement. Restructuring after the fact is possible but costs more than setting it up correctly.
Frequently asked questions
Does incorporating protect me personally?
Largely, yes — a corporation is a separate legal entity, so business liabilities generally stay with it. But directors can still be personally liable in specific situations, and lenders often ask for a personal guarantee that puts your assets back at risk.
Is an LLC available everywhere?
No. LLCs are a US structure. Canadian businesses typically incorporate federally or provincially instead; the closest planning tools are corporations and partnerships.
Can I change structure later?
Yes, businesses reorganize regularly, but it involves legal and tax steps and cost. It's cheaper to choose deliberately at the start.
Do I need a lawyer to incorporate?
You can file basic incorporation yourself, but the documents that actually protect you — shareholder agreements, share structure, director duties — are where legal advice pays for itself.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.