There are several benefits to incorporating a business. Which of the following is NOT a benefit of incorporating?

Question

Quizplus · Accepted Answer

Dividends paid to shareholders are not deductible business expenses, therefore it is not a benefit of incorporating. The other options (A, C, D) are benefits of incorporating. Option A mentions the small business deduction which provides a tax reduction on the first $500,000 of active business income. Option C mentions greater flexibility to bring family members on board as owners. Option D mentions the ability for the owner/employee to participate in a registered pension plan through the corporation.

There Are Several Benefits to Incorporating a Business