One major advantage of a company is that its shareholders have their liability limited to the amount that they have invested. This enables the owner of the company to protect their personal assets. This means that if a shareholder has 100 shares in a company valued at $5 per share, their debt is limited to $500.
Another advantage to incorporating a company is that profit earned is subject to the company tax rate of 30%. This would be beneficial to a sole proprietor whose income could otherwise be subject to a higher marginal tax rate.