Most Canadian family businesses should consider incorporation when annual profits consistently exceed $50,000 to $70,000, though the exact threshold depends on your province’s tax structure and your personal financial situation. Below this range, administrative costs and complexity often outweigh the tax benefits. Above it, the corporate tax structure typically begins to deliver meaningful savings.
The timing decision hinges primarily on the gap between personal and corporate tax rates. Corporations are subject to corporate tax rates that are generally lower than personal rates at higher income levels, creating an opportunity …
