Outsourced Accounting Services | Looking For The Best Reason To Incorporate?
Outsourced Accounting Services | reason To Incorporate?
There are many reasons why a business may choose to incorporate, however most business owners arenít aware of many of these benefits says outsourced accounting services. And in fact, business owners often think that the process is difficult, time consuming, and will drastically change the way they must run their business. Because of these misconceptions, business owners donít actually find out the truth about corporation, and miss out on all of the benefits. By incorporating, businesses can significantly affect their business which includes being able to increase the cash flow in their business much earlier in their business than if they donít incorporate. The reason for this is the significant tax savings.
There will be nobody will tell you that they prefer paying higher taxes, or will tell you that they donít want to receive it tax cuts if one was available to them says outsourced accounting services. So why is it that so many small businesses are not incorporating and taking advantage of the massive tax cut that they could see through incorporation? The top personal tax rate in Alberta is 48%, which is an absolutely terrible rate. That means for half of the money that is made, almost half of it goes to the government in taxes. This is a much too high tax rate, and businesses want to lower that tax rate through any means necessary. However the small business tax rate in Alberta is 11%, which is an absolutely amazing rate. Thatís almost half the personal tax rate in Alberta. Business owners can immediately take advantage of this great tax rate simply by incorporating their business. Despite what business owners may assume, incorporating a business is a very fast process, accountants can often complete the paperwork in a single day. Any smart business owner will want to take advantage of cutting their tax rate by 37% in one day.
The reason why saving so much taxes is so important to small businesses is that if an entrepreneur wants to save for their retirement, this will be much easier to do once they are being taxed less. By incorporating, a business owner can invest almost twice as much as they would before. For example if a business owner has thousand dollars to invest, 48% of that thousand dollars which is $480 goes to taxes. Once they incorporate, that thousand dollars only needs to have $111 be paid to the government in taxes, allowing the business owner to invest $890. Thatís significantly higher than and unincorporated business. Whatever reasons the business owner may want to save money, either for retirement, vacations or just increase their wealth, there is no more efficient way to help business owners save money than by cutting their taxes says outsourced accounting services.
Saving taxes within the business will also help the business owner save money in order to buy assets for the company. Doesnít matter what the assets are, whether itís a welding machine, an x-ray machine, vehicles for the company, or even a building. Outsourced accounting services says by paying less taxes, businesses can save money twice as fast in order to purchase assets for their business. Buying assets is a great way for businesses to grow their business, therefore helping them save money in order to achieve that goal can be a huge game changer for businesses.
Outsourced accounting services | reasons to incorporate
Entrepreneurs are unaware of all of the benefits of incorporating says outsourced accounting services, in fact they also are misled to believe that incorporating is a lot of work and can complicate their business. Neither of those statements is true, and business owners should take immediate action to incorporate their business to start seeing the many benefits. One of the biggest reasons to incorporate is to see a much lower tax rate, and if that is not reason enough for business owners there are many other great reasons that business owners would want to take advantage of what incorporating can do for their business.
One lesser-known benefit of incorporating is some businesses may not hire unincorporated companies to work on their job site or in their business. Outsourced accounting services the reason for this is not just a legitimacy concern, businesses were unincorporated may appear to be less serious about their business than businesses who are incorporated, but the main reason is, businesses that are hiring people to work on their job site, may be considered the companyís employee which increases their risk, and they donít want that hassle. Therefore they have a practice of only hiring incorporated businesses to work on their jobsites for example if Suncor has asked a welder to come onto their job site to do some welding, if there unincorporated, Suncor will not want that hassle of having to consider that unincorporated welder their employee. Incorporate the business, and increase your chances of landing more jobs.
Another little-known benefit of incorporating a business is decreasing the business ownerís personal liability. Many entrepreneurs donít know that by incorporating their business, they will significantly lowered their risk of being personally sued says outsourced accounting services. It doesnít eliminate the risk of being sued, but the risk is greatly diminished because the corporation takes on the risk of the business instead of the business owner. Every time a business owner works on a job, or is on a job site, they run the risk of being personally sued if theyíre not incorporated. That means the business owner, as well as all their assets including the house and car can be at risk. Many business owners would prefer to not risk the house that they and their family lives in. they can greatly reduce the risk of being personally sued by incorporating.
Another reason businesses make consider incorporating, is to protect their name says outsourced accounting services. If they do not incorporate using their tradename, business owners do not have the legal right to it, even if theyíve registered. Registering their tradename doesnít mean they own it, it only means they have a placeholder for it. Incorporating gives them the rights to own their own name, which most business owners should have. If they are building that name for themselves, and have a reputation as well as a brand identity incorporating that name will protect it.