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Business structures and Canada - Q for Diane and others

LamboMP

Bronze Contributor
Aug 13, 2007
337
170
63
Toronto
What are the best business structures for Canada and why?
 

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Diane Kennedy

Bronze Contributor
Aug 31, 2007
795
209
49
I just dropped an IM to Megan Hughes. She's an expert on Canada and UK. She said she'd pop in sometime tonight and answer the Q.
 

Megan H

New Contributor
Nov 26, 2007
16
6
19
Reno, NV
Hi there,

Unfortunately, my homelanders are not quite as diversified as here in the U.S. ... you're pretty much stuck with a corporation. You can choose a provincial incorporation, which qualifies you to do business in a single province, or you can choose a federal incorporation ... which still requires you to register in each province before you actually do business.

There are some good tax advantages for corporation owners, though. They are not the same tax animal that a C Corporation is in the U.S. My step-mother is a CGA (CPA, Canadian-Style) and we've had many conversations about business and taxes. Course they were usually over drinks ... but the general gist of it was, it's not that bad, and if you want asset protection and some tax breaks, a corporation is the way to go up north, even for owning real estate.

I've still got contacts in BC and Alberta - if you want something other than that, LMK and I'll see if what I can find for you.

Megan H
 
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OP
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LamboMP

Bronze Contributor
Aug 13, 2007
337
170
63
Toronto
Hi there,

Unfortunately, my homelanders are not quite as diversified as here in the U.S. ... you're pretty much stuck with a corporation. You can choose a provincial incorporation, which qualifies you to do business in a single province, or you can choose a federal incorporation ... which still requires you to register in each province before you actually do business.

There are some good tax advantages for corporation owners, though. They are not the same tax animal that a C Corporation is in the U.S. My step-mother is a CGA (CPA, Canadian-Style) and we've had many conversations about business and taxes. Course they were usually over drinks ... but the general gist of it was, it's not that bad, and if you want asset protection and some tax breaks, a corporation is the way to go up north, even for owning real estate.

I've still got contacts in BC and Alberta - if you want something other than that, LMK and I'll see if what I can find for you.

Megan H

Megan,

Thanks for your response.

I'm in Ontario. :)
 

kimberland

Bronze Contributor
Jul 25, 2007
825
120
38
I hold my business dealings within a corporation.
I did that for liability reasons,
and for a small measure of privacy.
It cost me about $1,500 to incorporate using a lawyer
and then $100 for the tax software every year.

However, if you have a baby business
(don't have employees, etc)
and are taking tax losses in the first few years,
it might make more sense to hold the business personally
and get liability insurance to cover.
That way you can offset the losses against income
and reduce overall taxes.

Remember that if you have sales of over $30,000 a year,
you need to register with the GST folks.
 

Poudda

New Contributor
Sep 7, 2007
118
12
22
Calgary, Alberta
Thanks for the info. Wasn't sure what I should do owning 2 little properties. In my circumstance, I own properties in another province. If I incorporate in Saskatchewan and live in alberta, I would have to have a power of attorney set up in Sask and through a lawyer or a big time property management company. Didn't see the worth of it from tax perspective or a cash flow perspective. DEFINITELY will review my insurance policy today though.

Rep up for Everyone.
 

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