Edmonton Accountant | Get Incorporation Because Its Good To Have
Edmonton accountant starts out with assuring us with a Confucius quote, saying “life is really simple but we insist on making a complicated.”
There is a statistic that says only 11% of business owners seek professional help. This is according to the company into it, which is the makers of QuickBooks.
Business owners often make the mistake of thinking that incorporating is far too much work. For this reason they continue to operate as unincorporated businesses or sole proprietorship’s and thus miss out on all the benefits of incorporation. The top personal tax rate in Alberta is 48%. In contrast, the small business tax rate in Alberta is 11%. What this means in terms of wealth accumulation is that if you have $1000 and you are paying a tax rate of 40% you will only have 520 extra dollars to put towards increasing your wealth, funding a retirement, etc. However, if you are falling under the 11% tax umbrella, you will have $890 with which to invest towards your future or for your company. This is a wonderful opportunity for business owners as, if you are trying to buy equipment, bear in mind that is not in fact under a business expense it is considered an asset purchase. In order to purchase an asset, therefore, you have to be making money.
As well, take into consideration that if you don’t incorporate, your risk of taking on personal liability increases exponentially. It is not absolute, but the risk is the Jetta mentally significantly higher if you are not incorporated, and you do in fact get sued, says Edmonton accountant, you may in fact lose your car, or will have your house or your life savings on the line. Further to that, your personal savings may as well be on the line with every unincorporated job that you do.
In fact, if you are in unincorporated company or a sole proprietorship, some people simply won’t hire you because, to them and their company, it is a legitimacy at issue. They may consider you simply dishonest, or fly-by-night company. There is in fact a risk, and rightfully so, of you being considered and deemed their employee.
Your tradename, says Edmonton accountant, to, may be in danger of being handed over to someone else if you are not incorporated. If you want to protect a tradename you should in fact be incorporated. For example, it’s like simply a placeholder if you only register the tradename with the court registries. It does not give you the sole owner of that tradename
Further to this, WCB coverage will be very hard, if not impossible to get without being incorporated. WCB likes to ensure the “prime contractor. If you are not in fact the prime contractor then you may not get coverage with WCB because you don’t have a WCB number.
Rest assured to that no, you do not need any new or updated software in order to do your accounts if you become incorporated. Most people will need account software anyway, if they have retained employees.
It is worthwhile in many ways and for many reasons to have your business properly incorporated, says Edmonton accountant. It is a very simple process of potentially one business day to complete the process. However, doctors and lawyers may be waiting a little longer to have their business incorporated, potentially two weeks as the charter professional accountant will need to have the stamp of approval from their governing body.
Intuit, the makers of QuickBooks has done a survey that has determined that only 11% of business owners seek professional help with their business. With the vast knowledge of any CPA, they will be able to pass down all of their information on new business owners, including the fact that incorporation is not in fact a lot of work and may save them a lot of money in the end. There are many benefits to becoming an incorporated company.
In Alberta, the top personal tax rate is 48%. However, you may be able to reap the benefits of being incorporated by paying only the 11% tax for small businesses. What that means is if you are incorporated and you have $1000 you will only be paying hundred and $10 in tax, and have $890 of money to put towards things that are personal at that you can say for, including retirement, putting that money back into your business, etc. On the contrary, if you are not incorporated and you are paying the personal tax rate of 40%, on your thousand dollars, expect to only have $520 left to plan your future.
Edmonton accountant reminds business owners that equipment is not in fact a business expense it is an asset purchase, in order to purchase an asset, the business must be a business that is taking and revenue. As well, if you don’t consider yourself for incorporation. You make in your city yourself at risk for taking on more personal liability. With an incorporated company your risk of personal liability significantly decreases. You may not in fact. You may not have to worry about losing your car or other huge personal assets such as your home or your personal savings if such a liability occurs.
If you are not incorporated, cautions Edmonton accountant, you may also in fact lose the right to your tradename. It is one thing to have your tradename registered with court registries. However that just works as a potential placeholder and does not give you any right to that name. However if you are incorporated, then you will have first rights to that tradename.
Be aware to the people and companies may not decide to hire you as you may be considered a personal liability to them and that company. They consider it a legitimacy issue, and may consider you a fly-by-night worker or company and there is, rightfully so, a risk of you being considered their employee.
Likewise, you will not be able to get WCB coverage as you are not one of the prime contractors.