Which business structure is right for you?

A. Because a corporation is a separate legal entity, you cannot turn a corporation into a sole proprietorship. In a scenario like this you would likely be dissolving the corporation, and registering as a sole proprietor.

A. A corporation’s business income will be taxed at the federal or provincial corporate tax rate, while a sole proprietor will be taxed at a personal rate. Corporate tax rates, in general, are lower than personal income tax rates, and corporations may also benefit from additional tax deductible business expenses.

A. As these are separate business structures, you cannot technically change from a sole proprietorship to a corporation. The reality is, there is no transition process from a sole proprietorship to incorporation. The corporation is a new legal entity, so you will need to incorporate from scratch.