What a sole proprietorship can never reach
Two developers shipping a prototype under their own names are building value inside a structure that cannot claim what Ontario offers studios. The gap is structural, not cosmetic:
| What is at stake | As a sole proprietor | Inside a CCPC |
|---|---|---|
| OIDMTC | Not available | Available to qualifying corporations filing an Ontario return |
| SR&ED at the enhanced refundable rate | Out of reach — that rate is reserved for CCPCs | Refundable cash against engine and tools R&D |
| Tax on profits left in the business | Your personal marginal rate | About 12.2% on the first $500,000 in Ontario |
| Selling the studio one day | An asset sale, taxed personally | A share sale that may reach the $1.25M lifetime capital gains exemption, if the QSBC tests are met |
| Platform and publisher agreements | You sign personally and carry the obligations | The corporation signs and carries them |
Timing matters more than most founders expect: credit claims are built from a corporation's own expenditures, so labour burned before incorporation is labour the claim never sees. Incorporating after a year of full-time development quietly donates that year.
Put the IP in the corporation before it is worth arguing about
A publisher's diligence, a platform's onboarding and an eventual acquirer all ask the same question: does the corporation actually own the game? That means written IP assignments from every founder, employee and contractor — the freelance animator in Lisbon included — running to the corporation, from the first commit. If the prototype was built personally before the company existed, the project can usually be moved in under a section 85 rollover without triggering immediate tax, but that transfer is simplest while the game is still a build, not a business with publisher interest and a Steam page. We handle the election alongside the Incorporation engagement rather than leaving it as a loose end.
The unglamorous setup platforms and publishers ask for
Storefront and publisher onboarding is where a half-finished incorporation gets exposed. Payout systems want a corporate bank account in the exact legal name; contracts want the corporation's full style and a director's signature; due diligence wants a minute book with the share register, resolutions and IP assignments actually in it. We set the business number, the corporate tax account, the HST account and — the month the first employee starts — the payroll account, in the right order, so nothing is retrofitted under deadline. Two duties come with the director's chair and deserve saying plainly: source deductions withheld from payroll and HST collected from customers are trust amounts, and directors can be personally liable when a corporation fails to remit them. A studio that automates remittances from day one never meets that rule.
Register for HST while the studio is still spending
Development years are all cost and little domestic revenue, which is exactly when voluntary HST registration earns its keep. Below $30,000 of taxable revenue registration is optional — but an unregistered studio pays 13% on rent, contractors, dev kits and software seats and recovers none of it. Registered, those input tax credits come back through refund-position returns, a pattern we cover on the studio tax filing page. Registering on day one, with the corporation, also avoids the awkward mid-project switch of identity that platforms and publishers dislike.
Founder shares are cheapest before the vertical slice
Issue the share structure at founding, while fair market value is nominal: who holds voting shares, how a future co-founder or key hire comes in, whether a discretionary class makes sense for later planning. Adding a partner after the game has visible value is a taxable event with a valuation argument attached; adding one at incorporation costs almost nothing. The $1.25M capital gains exemption on a future share sale also rewards structure set early — the QSBC tests look at what the corporation held and for how long, and clean history is easier to grow than to repair. None of this requires a big-firm budget: a two-person team still in prototype often needs only CPA Quick Support at $99/month for the questions between milestones, with incorporation itself quoted in writing after a free 15-minute discovery call. We work with studios across Mississauga and the GTA at exactly that stage.
