Choosing the right legal structure is one of the most important decisions for a small business owner in Canada. The structure you select affects how income is taxed, how profits are withdrawn, how losses are treated, and how much personal risk you carry. Many entrepreneurs start as sole proprietors and later consider incorporation as their business grows. Each option has different tax rules, reporting requirements, and long-term effects. This course explains the tax differences between operating as a sole proprietorship and running a corporation. It also covers how owner-managers are paid, whether through salary or dividends, and what that means for overall tax liability. You will also learn basic tax planning strategies, how incorporation changes legal exposure, and what to consider for long-term planning. By the end, you will understand how structure influences tax results and business risk.

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By the end of this course, learners will be able to:

• Explain the key differences between a sole proprietorship and a corporation in Canada.
• Compare personal marginal tax rates with corporate tax rates and identify when tax deferral may apply.
• Distinguish between salary and dividends in terms of tax treatment and reporting requirements.
• Identify CPP obligations and payroll responsibilities for owner-managers.
• Apply basic tax planning strategies to manage withdrawals from a corporation.
• Assess how retaining earnings inside a corporation affects long-term tax outcomes.
• Explain how incorporation changes personal liability exposure.
• Evaluate long-term considerations such as share sales and capital gains planning.