NEXTAGENT FINANCE INSIGHTS
Sole proprietorship or corporation? Start with the legal facts
Structure changes who owns the business, how income is reported, and which liabilities and filings exist. It is more than a tax-rate comparison.
简体中文A sole proprietorship is owned by one individual and is not legally separate from that owner. The owner reports net business income on a personal return and assumes the business risks.
What changes with a corporation?
A corporation is a separate legal entity that can own property and enter contracts in its own name. It has corporate records and tax filings; shareholders cannot personally claim corporate losses.
A B.C. registration detail
B.C. generally requires a sole proprietor using a business name to reserve and register it. A person operating only under their own name may not need that provincial business-name registration. Licences and CRA program accounts are separate questions.
- List owners, contracts, debt and expected profit.
- Identify provincial registration and licence needs.
- Ask a lawyer/accountant about liability, incorporation costs and tax facts before changing structure.
Government sources
- CRA — Setting up your business (Accessed: 2026-07-19)
- CRA — Sole proprietorship (Accessed: 2026-07-19)
- CRA — Corporation (Accessed: 2026-07-19)
- B.C. — Sole proprietorships and partnerships (Accessed: 2026-07-19)