I've been doing some development work here and there for a friend of mine who is trying to start up a web-based branding/marketing company in Canada (I am also in Canada). To my knowledge he isn't incorporated. I'm being paid as a contractor.
Recently he told me that he had a large project coming down the pipes that will make each of us six figures this year. This is perfect as it would pay for my tuition and all my expenses and I could finish school debt-free and with a head-start. But I've started wondering if I should form some kind of corporation around me. I'd like to:
- Minimize the taxes I have to pay (Someone told me that I'd be losing 50% to income taxes)
- Write off a new computer (I really need one)
- Write off a fraction of a car (I don't have a car, and I'm going to school out of province; it's a huge pain--plus I need to make regular four hour trips for meetings with the company who has commissioned this project)
- Protect myself from lawsuits (Apparently this product is being funded by several large companies who want it; that worries me)
I don't really know anything about the pros/cons of different types of companies, or how business taxation works in Canada, or anything to do with owning a business really. I'm looking for some guidance on whether this is the right move, and if so, what kind of corporation to form and what steps I need to take.