You can save taxes.
It is generally said that the incorporation is tax advantageous when the level of annual income is continuously over five million yen. As for concrete figures, please confirm with a tax accountant.
You can gain the social reliability.
Some companies do not do business with sole proprietors. Also, corporations are generally advantageous for bank borrowing.
You need to pay taxes even in the red.
In regard to the corporate inhabitant tax, there is a tax on per capita basis to be paid according to the amount of capital stock even if the corporate results are in deficit. There are slight changes in amount depending on the municipalities, however, at least 70,000 yen must be paid.
Compulsory social insurance The incorporation requires to join the health insurance and the employee pension insurance.