CFO Services | Starting a Business
A sad state of affairs dentist at sad statistic is the fact that, and it is a fact says CFO services, that 50% of all businesses fail the first five years of existence.
Often times what will happen is a client will come in to see a charter professional accountant after they have spoken with or heard from the Canada revenue agency or after they have depleted most of their money. That unfortunately limits some of the things that the CPA can do for them. In the case of the first person that they should go to after starting a business is not in fact a lawyer. It should be an experienced charter professional accountant. The CPA will consult with you to make sure that this considerable move makes sense for you economically, will make you think whether it is feasible for you are not, will talk about a business structure, and how those business owners should deal with their price structure.
If in fact you make the ill-fated decision of incorporating on your own, advises CFO services, and he went to get corporate registries to get your certificate of registration for your business, you may not be so proud is to think “I got this done all by myself.” Oftentimes they don’t have the proper articles of incorporation you have to give those articles of incorporation there in restated by a charter professional accountant to avoid paying significant extra tax. And it is quite significant and the tax can potentially obliterate your potential revenue. In fact, good lawyers were point your back to your CPA before you incorporate accountants can give the lawyer the tax recipe or tax structure of the business. They can also get a sense of what’s going on in the business, the personal circumstances of the owner, how can the people get paid, who’s involved, then the tax instructions.
Yes, says CFO services, in fact there is a type of business structure that will allow you to operate without getting incorporated. This term is called proprietorship. The activities of your proprietorship will simply get reported on your personal tax return. However, if something goes wrong and you potentially get into an accident or you are sued, you may have to withstand significant personal losses and assets such as your house, your life savings, your car etc. Consider that there is always risk in any business that you take. For example does your business involve driving anywhere at any time? Well of course it does because potentially you are driving to work. As a matter of fact, it is almost completely unavoidable to have no risk in any business whatsoever the second reason why you potentially can operate as a proprietorship but it is not suggested or recommended at all is the fact that you can end up paying more in taxes. For example if you make $50,000 in profits or more it does not make sense to work as a proprietorship. You might as well just incorporate and pay 11% tax the CRA instead of 48%.
Your CPA can be your guide for a lot of the formalities, the idiosyncrasies and the revenue and tax savings when you have decided to start a new business, says CFO services.
The first person that you should think about hiring is not in fact a lawyer. As a matter fact the lawyer might actually refer you back to a charter professional accountant before you decide to incorporate your business a CPA should in fact be the first person that you do talk to and retain in order to help you with all the legalities and paperwork of incorporating your business. Your CPA will advise you and sit down with you to ask if starting a business will actually make sense for you economically and other such questions as determining your pay structure are you missing anything in starting a business, how you should in fact price your product or service, etc.
It is not advisable, says CFO services, to go ahead and incorporate by yourself. Often times will happen is you will in fact be issued a certificate of registration however, they will not be given the proper articles of incorporation. Therefore upon but coming back to the CPA they will have to get the articles of incorporation restated to avoid paying a lot of extra tax which could completely kill all of your revenue.
As well, the accountant can give you the lawyer the tax recipe or the tax structure of the business this is important as you begin to grow your business and understand the idiosyncrasies and what goes in to making the business lucrative. If in fact you take it or a lawyer before a charter professional accountant you are in fact making one step forward however two steps back. New paraffin CPA will advise you against getting involved with the business with lots of liability. They do this and will advise this of new business owners as well as seasoned veteran business owners
Yes in fact you can run a business as a proprietorship however it is not at all recommended nor may it be feasible for example if you are running $50,000 of profits or more running a proprietorship just doesn’t make any sense and you should be incorporating so that you can get the potential smaller tax. For example in Alberta, Canada the tax for incorporated companies is 11% where is if you are strictly just a proprietorship you will be paying 40%.
There are some CPAs that will charge you for the incorporation of your business and considering getting you ready to owner own business, says CFO services. However normally look for a CPA that will give you a free first consultation. One of the things that the CPA will first advise you as this is a business 101 consideration, is that 50% of businesses are more likely to grow their revenue if they do a business plan. The business plan may be easily solved with your charter professional accountant.