Edmonton Accountant | Incorporation Success
There are many things that you could potentially lose personally and professionally if you do not consider incorporation for your small business, says Edmonton accountant. First off, consider Confucius quote that says quote life is really simple, but we insist on making it complicated.”
There are many benefits, says Edmonton accountant, that incorporated businesses can assume such as retaining their tradename, which essentially saves them from losing their identity, having to rebrand, and potentially losing customers because they can’t be found. It is far easier to keep incorporation so that you can keep your business name so that you can keep your identity you’re after year, says Edmonton accountant.
Likewise is far easier to accumulate wealth quicker if you are incorporated. Consider the fact that if you are incorporated you will be paying far less in tax, essentially 37% less. That’s 30% more revenue that you can keep into your business in case things get tough, or, you can put it towards your retirement, children’s post secondary school, etc.
Investment might be far easier with more money from the considerable less tax that you will be paying. Your car could be paid off quicker your house to be paid off quicker, you could put more money into the business by hiring new staff, buy new equipment etc.
Considering equipment is not a business expense but an asset purchase. You need to have money in the bank in order to pay for the piece of equipment outright or make payments on it as it is an asset.
If you are not incorporated business, some people won’t hire you because it becomes then a legitimacy issue or their company. It looks as though you may be a fly-by-night company, and there may be a risk, rightfully so have you being deemed their employee. In terms of incorporation and optics when it comes to another business or the Canada revenue agency, incorporation is very important.
Consider your professional identity that you’ve worked so hard to maintain, and keep as an individual and outstanding business. You may potentially lose your legal right to your business name if you find that someday comes along and incorporates their business and uses your name first. That gives them the legal right to retain your name, even though you may potentially have registered your name with court registries. Court registries does not supersede the incorporation of the company.
Mistakenly, many people think that incorporation is more a hassle than anything else. They feel as though, although it is a fact that they will be going from one tax account to four or maybe five, that it will be a hassle to maintain all of these business in tax accounts. However, they should be exactly the reason why you have retained a certified professional accountant. Your account will be able to submit all forms and except 12 postdated checks for you to pay to the Canada revenue agency and one time year basis. Your certified professional accountant will be able to take care of that.
Business owners think that, says Edmonton accountant, incorporation of their business is far more work than is needed or they just don’t want to deal with it. These businesses full heartedly will continue to operate as unincorporated businesses or sole proprietorship’s and never learn or benefit from all of the amazing things that are coming out of incorporated businesses. These are the businesses that have potentially not retained a charter professional accountant to help them with their taxes and their bookkeeping, or do not have them to advise the small business owners of such wonderful tax and revenue savings.
Intuit, the maker of QuickBooks has some very interesting and telling statistics in regards to small businesses. First off, Edmonton accountant has learned, that, according to this Intuit survey, 50% of businesses fail in five years that could potentially be because they do not learn of a lot of the benefits of tax savings because of incorporation.
As well, 82% of business owners would sadly score less then 70% on basic business financial items tests or financial literacy tests. If a small business owners would just retain a charter professional accountant, says Edmonton accountant, they would be able to learn of all of the wonderful tax savings and revenue savings that there incorporated business can enjoy it. One such revenue savings and tax savings is, the top personal tax rate in Alberta Canada is 40%. In contrast, the top small business rate tax in Alberta Canada is only 11%. That is 37% change in tax. What this means is if a business has $1000 they will be saving $370 more if they are incorporated than if they weren’t. That extra income can certainly pay for new employees to help ease the workload, more equipment for your business become more efficient, or presidentially putting that money aside for you to think about retiring earlier or paying for your children’s post secondary education.
Incorporation, or lack thereof, becomes a legitimacy issue to, with other businesses. If you’re contracted out by another company and you are not incorporated they might not work with you and essentially in the contract or in the business relationship with you. That just means you blast a potential client or job. They might consider you, because you do not have incorporation that you are some fly-by-night company, and distrustful. That too as well the Canada revenue agency might think that you are deemed that some companies employee.
If in fact you are solar premier and you go and incorporate, it is a fallacy to think that you will need any new or state-of-the-art software to add so as to take care of your business contracts and accounts. In fact, you don’t need anything, and you probably will have already had the software that you need anyways because you have employees working for you and that business. The new accounts that you have with incorporation are easy to maintain if you have a good relationship with your accountant.