Key features (true across Canada not just SK)
Sole Proprietorship
- personal liability (creditors can sue you in your own personal name and for your personal assets)
- trading in your personal name operating as a registered business name (natural person).
- All your business income is taxed as personal income and is combined with all personal income you have.
- Less expensive to operate, but more risky.
Incorporation
- Limited personal liability. Only liable personally if you signed personal surety
- Trading as a separate legal entity (unnatural person).
- Business income is taxed for the business. Not a part of your personal taxes. (there are several potential tax benefits that could significantly reduce your overall taxes significantly. Worth talking to an accountant about how to best structure your company)
- Somewhat more expensive to operate, but worth the reduced risk associated with limited liability. (my opinion)
Good luck
