Edmonton Accountant | Incorporation Is Vital For Success
According to Edmonton accountant, an unincorporated company runs the risk of many liabilities in and responsibilities and potential loss of revenue or salary. According to intuit, the maker of QuickBooks, only 11% of small business owners will actually seek professional help and guard against losing much revenue and take on far more liability. These liabilities may include loss of your car, your house, or your life savings, if you were ever in the unfortunate event of being sued. As well, your business will as well be on the line and may be in jeopardy of losing significant funds and revenue because you are not saving as much on tax as you could be. Consider that the top personal tax rate number is 40%. On the contrary, the top tax rate for small businesses is only 11%. On average what that means, as you will have approximately 300 more dollars to spend per thousand dollars on better preparing for retirement, buying more equipment for your business, new employees, etc. You have a much better chance of increasing your wealth more quickly if you have incorporated your company.
There is a significant chance of you losing a lot, Edmonton accountant mentions, if in fact you do get sued on a job. You will not have an incorporation to fall back on. As well, assuming that unfortunately yourself or one of your subordinates gets injured is very difficult to get WC coverage as WCB itself likes to ensure the prime contractor. The reason for this is because you yourself, being a an unincorporated company do not have a WCB number. It is so easy to incorporate and does not require any new software to program or input when you do deal with more of your accounts. However, dealing with a few more accounts because incorporation is minor as you may just be able to hand them off to your charter professional accountant and they may advise you to simply write 12 postdated checks per year.
In fact, you may go from one tax account to four or five tax counts, which is often why many small businesses, mistakenly, have a fear of incorporating. These accounts may include a payroll account, a federal and provincial tax account, and the GST account.
The process of making tax payment absolutely can be simple find and is just a matter of getting together with your accountant so that he may be able to put the small business owner on a schedule in order to pay those accounts monthly. Those can be paid again, with postdated checks. Your accountant will then hand the checks over to the government as they become due. It’s a simple as that. That can be done on an annual basis so you don’t have to worry about it more than once a year. You sign the checks, you hand them over to your accountant, and your accountant does the rest, says Edmonton accountant.
With incorporation, you stand to save a lot more money year-over-year.
If your business does not incorporate, says Edmonton accountant, there are many repercussions that may potentially happen to yourself personally or your business.
Small business owners often think that incorporation is a long arduous process that takes weeks or even months to do. They may even think that they must go out of their way more than a few times to visit with their accountant so that they can sign things over and get things done in order to incorporate. This is simply not true, and in fact, it can take as little as be done in one business day. It is not at all a drawnout process. A caution though, to doctors and lawyers as it may take a little bit longer to incorporate as your accountant will need a stamp of approval from their governing body. However this doesn’t take any more than about two weeks.
Confucius counsels us with the click quote saying, “life is really simple, but we insist on making a complicated.” This can be said for incorporation. The benefits far outweigh the consequences in terms of positive business group business growth and saving money.
Let’s say, says Edmonton accountant, example you have $1000 and you are a small, unincorporated business. You will therefore have to, as the top personal tax rate number is 40% have to pay $480 on that thousand dollars to the government. You will only have $520 to look forward to spending on growing your business, or your future. However, if you are incorporated business and you are paying the small business tax rate of only 11%, you will have $890 to put towards your retirement, bring it back into your business for better growth, or just enjoying better financial freedom or time freedom.
Keep in mind, reminds Edmonton accountant, to for small business owners, that equipment that you may need to buy for your small business is not in fact a business expense. It is in fact labelled as an asset purchase. With that, in order to purchase an asset, you will have to have revenue in the bank to pay for it or to make payments on it.
Your personal liability increases as well if you are not incorporated. Your personal risk is significantly lower if you are in fact incorporated your personal goods and assets, if you get sued, can be a target if in fact you lose money when you get sued. This can include, but is not limited to, your house, your life savings, your car, etc.
As well you will potentially lose the right to your tradename. If in fact you simply register your tradename with court registries then, someone who may be incorporated and chooses same tradename as you has the legal right to that name. Registries of a tradename with court registries is simply just a placeholder and nothing more than that.
You will not get coverage from WCB as well as you are not the prime contractor and you do not have a WCB number.