Sole Proprietor vs Incorporation

It happens often. A production corporation in a contract “requests” I be incorporated to do their work. I never have and never will be incorporated. Maybe, never say never. The request happens because the corporation wants to limit their responsibility-liability-to take me on as an employee. As a confirmed ronin, I do not want to be taken on as an employee, but these contracts are boilerplate and sometimes those plates need to be shifted.
I have resisted being “incorporated”- as in becoming a separate body or “corpus” for those who know Latin. According to my long time and very astute accountant, it doesn’t really pay until one is making consistently over $300K per year. While hope springs eternal, so far, that’s not me. There are benefits to being incorporated, just not for my circumstances.
Why do these production bodies ask a freelancer to be incorporated? Because they don’t want to take on the burden of a contractor as an employee with all the benefits and liabilities that imposes.
Don’t blame the corporations. They are out to make sure they have enough resources to keep themselves alive. They need to conserve those resources to sustain themselves. It’s evolutionary. As a freelancer, one also must conserve and hopefully gain resources to sustain oneself. Being incorporated doesn’t help.
I’ve known a number of freelancers who were tempted by the siren call -or corporate demand-of incorporation. They paid lawyers and accountants to set one up, paid lawyers and accountants to do two sets of books and taxes -one of their person and one for their new corpus, paid lawyers and accountants for audits and compliance, etc. (They did get an official corporate seal for documents and were able to have a board of directors with their spouse or mother as co-Chairperson, CFO or whatever.) It always seemed to me to be a waste of time and money (the key ronin resources) to satisfy a perceived need. Most of them collapsed those corporations because they were too much hassle.
The problem arises if the ronin only fights-practices their craft- for one feudal lord. To be a true sole proprietor, one needs a number of clients. The dodge for the corporation is to hire someone as a independent contractor to avoid the liability of benefits and taxes. If the contractor only works for the corp exclusively, they are “deemed an employee” in the eyes of the government. (That’s what the Employee / Employer Relationship Analysis or Scope of Responsibility part of your contract covers.)
For example, as an art director, you are expected to arrive at the studio-but that’s shifting-, use the corp’s resources (AKA overhead) -I.T., equipment, desk, software license, chair and coffee machine-and direct others in the company’s employ. Unless you are an independent corporation, you are deemed an employee of the mothership and they-really It- needs to pay for your employment insurance, CPP, withholding tax, health benefits, etc. That’s why It wants you to be another It.
Judge for yourself whether doing so is illegal or immoral. It's neither IMHO. It is just the corporation's way of protecting it’s resources for owners, full time employee- a diminishing cohort- and, if it is a publicly traded company, shareholders.
So, this ronin always changes the boilerplate-read your contract!- to “Sole Proprietor.” I look after my own overhead: benefits, insurance, equipment, and coffee. BUT, I am clear I have other clients. If you don’t, bite the apple and incorporate.
Disclaimer: I am not now and never have been a lawyer or accountant. I follow my informed -as in I read, read, read and discuss with professionals in their disciplines-perception of the rules as they apply to my situation. Everybody’s situation is different.
AND, use one of your free Globe articles to read another take on this here: https://www.theglobeandmail.com/business/careers/career-advice/article-what-are-the-guidelines-around-working-with-freelancers-long-term/