Business structures and Canada - Q for Diane and others

[LamboMP]

What are the best business structures for Canada and why?

 

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[Diane Kennedy]

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]

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

 

[LamboMP]

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.

 

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[kimberland]

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]

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.