Incorporation of a business is an important decision which is based on both legal, accounting and income tax issues.  All of the above issues should be resolved through discussion with your lawyer and accountant prior to incorporation.  From a tax point of view timing is so important to give the the new business a fighting chance in the world of business.  If losses are generated in the start up period, generally one should use these losses to offset qualifying income from other sources on a personal basis assuming of course that there are no liability issues.  So seek advice with your professional before you take the plunge.