Vancouver CPA | Incorporate Your Business Quickly
Some business owners think that it is a good idea to not incorporate their business right away according to Vancouver CPA. They think that this can help them save money. That they are not taking into consideration the tax savings that they can enjoy once they incorporate.
In fact, businesses in British Columbia who are not incorporated. Can be hit with up to fifty-three and a half percent in taxes. Because when they are a sole proprietor. Their business income taxed at the personal tax rate.
And depending on what tax bracket people are in, they can end up paying over 50% in taxes. Instead of the 11% tax rate that corporations enjoy Canada. Therefore, by incorporating, business owners can start saving a very large percentage of taxes.
The taxes that they are not paying the government can stay in their business and help them grow and succeed. Such as by helping them pay for another employee. They can use the money to buy an asset they need to to help them grow or be more efficient.
Or, business owners can use that money in order to increase their sales and marketing efforts. And avoid the number one reason why businesses in Canada fail. Which is they are unable to find enough customers to buy their products and services.
Being able to save this is significant amount of money can be very beneficial for all businesses, regardless of if they are large or small. Or if they are new or have been around for many years.
And while many business owners understand that once they incorporate, they will have accounting bills. Because they are reporting requirements will change. Even once they have hired their Vancouver CPA. This savings that they will get will out shadow any money that they have to spend to get there.
However, saving money on business taxes is not the only way that business owners can benefit from incorporating. Many proprietors are not aware until they reach their year end, that they are responsible to pay both the employee and the employer contribution of CPP.
And when they find out at the end of the year, when they get a bill from Canada revenue agency. Asking for an additional fifty-two hundred dollars. Can be difficult or even impossible for small businesses to come up with. Which can result in penalties and late fees.
And there is no way around this, unless a business decides to incorporate. This is the reasons why Vancouver CPA recommends all of their clients matter how big or small they are incorporate their business as soon as possible. So that they can avoid paying additional taxes. That will be necessary once they incorporate.
However, many business owners still have questions. Thinking that they have special circumstances that make incorporating not beneficial in their situation. For any businesses that still have questions. They should set up an appointment with their Vancouver CPA. so that they can end up making the right decision for their business.
Is your Vancouver CPA really the best?
Although many business owners put off incorporating their business says Vancouver CPA. They do this to save money, but the benefits that they can get from incorporating. Can often be more beneficial than the money that they would end up saving.
This is why Vancouver CPA almost always suggests that their clients incorporate as soon as they can. Because the benefits that they will have can help them grow their business, protect themselves and their name. And take more work than ever before.
One of the first things that business owners will gain when they incorporate their business. Is limited liability. Once businesses incorporate, it is the corporation that shoulders liability associated with conducting business.
And even in a low risk business such as web design or graphic design. There are inherent risks associated with operating a business.
If a business owner gets sued while conducting their business, if they are not incorporated. It is the business owner personally gets sued. Which means their personal assets are at risk.
But if a business owner incorporates, and they get sued. It is the company itself as an entity that gets sued. Sheltering the business owner and their assets from the risk of lawsuit.
And while incorporation can protect a person and their assets. Incorporation can also protect the businesses name legally. And while many entrepreneurs believe that registering their tradename legally protects it. All it does is give it a placeholder.
But registering a name will not stop someone else from incorporating that tradename. And whoever incorporates the name, gets the legal rights to it. Therefore, business owners should protect the name they are building, by incorporating their business as quickly as possible.
Another reason why business owners should incorporate quickly. Is because they may be refused entry onto some jobsites because they are not incorporated. In fact, some companies actually refuse to hire sole proprietors.
Because there are risks with Canada revenue agency considering sole proprietors to be employees of the business. If CRA does consider a proprietor to be an employee. The company will have to pay all payroll remittances that would have been owed. Since that person’s first day on the job.
This can cause the business to have to pay thousands of dollars to the government. And so to eliminate this risk. They simply have a policy of only hiring contractors that are incorporated. And if a small business owner does not incorporated, they may not be allowed onto certain job sites.
Therefore, by incorporating, business owners will not limit themselves to what jobs they can accept. And will not limit themselves to what companies will hire them. Which will help them grow their business faster, by being able to take every job that comes their way.
However, if business owners still have questions. Or want to know if there are any other benefits to incorporating early on. They should contact their Vancouver CPA for free consultation. So that they can find the answers to their specific individual questions. Help them make the decision that is right for them.