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E-Myth – “Why most small businesses don’t work & what to do about it”

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Edmonton Accounting Firm | Incorporate Now To Save Money

It can be a very common misconception, says Edmonton accounting firm, that incorporating your business is a long, drawnout hassle, that requires time, and much communication with your charter professional accountant. Another misconception is that it won’t potentially do anything for your business one way or the other. Many businesses don’t realize the benefits of incorporating their business in terms of retaining revenue, protecting yourself and your family and employees from potential lawsuits, or guarding against losing everything that you own and have worked so hard for.

Let’s dispel the first misconception in that incorporation can in fact only take one business day to begin and complete. Oftentimes to this can be done over the phone so you can save a trip to your charter professional accountant. It is marginally different if you are a doctor and a lawyer as your CPA will need a stamp of approval from their governing body, which could take upwards of two weeks.

Another misconception, as Edmonton accounting firm mentions, is that it won’t do anything for your business one way or another. This will do, contrarily, much for your business in that you will be paying significantly less tax. If you are not incorporated, and your business is located in Alberta Canada, you will be paying a personal tax rate of 40%. On the contrary, if you do incorporate you are now considered a small business and that small business carries a tax rate of only 11%. Putting this into monetary perspective, you may choose to either put forth $520 on every thousand dollars that you are in, or you may choose to retain $890 on every thousand dollars that you are in, if you are in fact incorporated. That is a savings of $370 that you can put forth towards your retirement, Newcomen for your business, a holiday for you and your family, hiring new staff to make things much more efficient, etc. It is much easier to accumulate wealth if you are an incorporated company.

As well, warns Edmonton accounting firm, your personal liability increases at a very high level if in fact you decide not to go through the very easy process incorporation for your business. Incorporation doesn’t fact offer security for yourself, your family, and your employees if you are ever to be sued for a job that you do. This could mean the loss of all of your personal assets including your business. Bear in mind to this could be the loss of work for all of your employees that need to support their families and pay their bills.

Consider too, that some companies won’t hire you if you are not incorporated because quite simply the optics don’t look good. You do not look like a legitimate company, which sends a lot of red flags towards companies looking to subcontract. They may think that you will run out on bills, or leave a job unfinished or there is subpar work.

If you’re not incorporated, you may potentially lose your tradename as you have absently no legal right to it.

Consider statistics that into it, the maker of QuickBooks, offers to all small business owners and is readily available in the public domain, states Edmonton accounting firm.. The statistics include that only 11% of small businesses will in fact seek the help and expertise of a charter professional accountant. Another stark and difficult statistic is the fact that 50% of businesses will in fact dissolve within the first five years of their inception. As well, 82% of business owners would score less then 70% on a basic financial test and altogether basic financial terms and items.

We need to establish, says Edmonton accounting firm, that it is of paramount importance for brand-new business to retain a charter professional accountant for many reasons, one of which is to offer very sound and expert advice on how to keep your small business profitable. One of the first pieces of advice that a charter professional accountant will in fact give you is to consider and go through the very easy process of incorporating your business. Contrary to popular belief, this is a very quick very easy process which can potentially only take one business day, and may not need you to take the time I your data travel to your accounts office. You may in fact simply be able to do it all over the phone.

Don’t worry too much as well if you are a lawyer Dr. and you want to incorporate. This process can potentially take a little bit longer. The work from the perspective of the charter professional accountant will be done, however, they will have to receive a stamp of approval from those industries governing bodies. That will be work done on the other side and could take potentially two weeks.

The whole idea of owning your own business, suggests Edmonton accounting firm, is to accumulate wealth as quickly as you possibly can so that you may take care of your employees, and your family. Another thing that a charter professional accountant will in fact discuss with you in terms of incorporation is the fact that, upon a first meeting with a charter professional accountant, they will go through all of your financials. It is very likely, and they will be able to point out quite quickly, that you are paying entirely too much tax. In fact, obviously you will not have already been incorporated so you will be be be paying, for example in Alberta Canada, 48% in personal tax. Your charter professional accountant will make you aware that if you incorporate you will be able to move to a different bracket in the small business tax and use their rates, of 11%. That is a savings in tax of 37%. If we do some quick math, that will be $370 saved on every thousand dollars that your business makes. You may put the three had $70 towards the growth of your business and equipment or personnel, personal aspects of your life such as a holiday etc.