You can expect to receive the following included in our incorporation package.

-Government filing fees included
-Third Party Disbursements
-Electronic Minute Book
-Articles & Certificate of Incorporation
-Corporate by Laws & Resolutions
-Share certificates & Subscriptions
-Registers & ledgers
-Name searches (Pre-Nuans & Nuans)
-Business number/Tax Accounts from CRA
-Form 1 or Form 2 Initial Returns
-Advice and Consultation
-Electronic signing through Docusign

You can have $0 in sales and still incorporate to use the asset protection benefits.

However, to realize true tax-saving benefits it generally makes sense to wait until you have at least $50,000 of annual sales.

This is generally the revenue level where the costs of maintenance of a corporation are offset by the tax savings generated.

There are really 4 taxes you have to understand and how they work.

Personal Taxes: This is a tax that everyone in Canada pays. It’s based on your income and it doesn’t matter if you have a Corporation or not you will still be required to pay personal taxes based on income tiers.

Corporate Taxes: This is based on your net income which is Total Revenue minus Total Expenses = Net Income. The total corporate tax is roughly 12.5% of this net income. If you have a loss we can claim that loss on Schedule 4 to apply the loss of the current year to the prior year resulting in a Corporate REFUND.

Payroll Taxes: This is based on a few metrics such as the Employee’s Gross Payroll + CPP Employee + CPP Employer + EI Employee + EI Employer + Income Tax Deductions. These taxes are submitted on a monthly basis by the 15th of the month. We generally have clients set up a proper payroll solution which automates all the tedious tasks related to Payroll management.

HST Taxes: This taxation commonly known as sales tax is basically the following. Total Sales take 13% and Total purchases take 13% and the difference is basically what you owe in Taxes. If you make under $400,000 a year we can see if the Quick Method of HST makes sense for you which is Total Sales + 13% HST and the total of that is multiplied by 8.8%. Whatever is the lowest we choose that option and file the respective elections.

There is a mandatory requirement from the Canada Revenue Agency that you ‘keep your records’.

This means you must keep your records in such a manner that it is easily audited or reviewed from the CRA.

The process of keeping your records is called “Bookkeeping”

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/keeping-records.html

Corporations should be seen as an Asset and just like any asset needs ongoing maintenance.

The good thing is with the right Accounting team you can generate more then enough Tax savings to pay for professional fees which are 100% write off.

A corporation requires a (T2 Corporation Tax return) which can only be completed by having proper bookkeeping completed.

After the bookkeeping process is completed a Trial Balance is generated which is needed for Schedule 125 (Income statement) and Schedule 100 (Balance sheet)

In order to realize the tax benefits tax compliance for the corporation is needed similar to your personal income tax compliance.

You can expect $500 to $10000 a year as an average cost of maintenance of the corporation depending on the purpose of the corporation.

Corporate Tax Filing = https://capexcpa.com/corporatetax

Bookkeeping = https://capexcpa.com/bookkeeping

Accounting Plans = https://capexcpa.com/monthlyplans

Yes, compared to a Sole Proprietorship a Corporation may help to reduce your total tax bill.

Your Corporation tax is based on a flat rate of 12.2% on net income which is Total Revenue minus Total Expenses deducted.

As compared to a Sole Proprietorship you will be taxed higher on the net income as the taxation is based on tax brackets, not on a flat tax basis.

You will still be subject to paying personal taxes when withdrawing money from the corporation but you can manage this by keeping the majority of the money not required to maintain your lifestyle within the corporation.

Depends. Setting up a Corporation lets you tap into the ability to do Dividends.

The benefit of Dividends is that they are not subject to Canada Pension Plan premiums and you can avoid headaches associated to maintaining payroll. Paying yourself a dividend is easy. Just e-transfer yourself the money or write a cheque. We will code it to due to shareholders and clear it with a Dividend slip at the end of the year during your year-end.

The benefit of Salaries is that it is a tax write-off against your corporation and increases your RRSP room and you are also contributing towards your CPP pension benefits paid out at retirement. You get to avoid paying Employment Insurance as a shareholder however, you are stuck paying the CPP premiums. Running payroll also carries costs related to processing fees and more strict CRA regulations.

Yes. The Canada Revenue Agency can audit any corporate document to ensure you are compliant. The Canada Revenue Agency can send you Audit or Review letters. If you receive such a letter we can help you decipher it and handle the CRA management completely.

We also offer CRA Audit protection on our CFO plan which keeps you headache-free from CRA.

If you prefer to manage your CRA audits when and if they happen please visit the following to book in a time slot.

https://capexcpa.com/cracapex

We require a minimum of 5 Business days to incorporate a company which includes time to put your incorporation package documents together.

Under the current income tax rules, the TOSI applies the highest marginal tax rate (currently 33%) to "split income" of an individual under the age of 18.

TOSI may also apply to dividends paid to family members who have worked less than 20 hours a week for the corporation in a substantial manner.

In general, an individual's split income includes certain taxable dividends, taxable capital gains and income from partnerships or trusts.

Income sprinkling – sometimes referred to as "income splitting" – is a strategy that can be used by high-income owners of private corporations to divert their income to family members with lower personal tax rates.

A holding company is a special purpose corporation that owns the shares of another corporation usually the main operating company. A holding company is designed to protect the assets of the operating company owns such as buildings, cash. If you want to protect your assets consider a holding company.

Yes, dividends are very useful for tax planning if deployed correctly. Family members who are shareholders and are involved can receive a reasonable dividend from the corporation. Generally, TOSI rules stipulate that the family member must work at least 20 hours a week continuously in the business.

If you want to maximize your income splitting making your spouse a shareholder is a great idea. There are some restrictions on the amount of dividends that can be paid to a spouse and we need to check if TOSI applies to you.

TOSI = Tax on Split income.

A director is elected by the Board of Directors and holds a fiduciary duty to the shareholders and must make decisions in the favour of shareholders.

Shareholders are owners of the corporation and may or may not be directors.

A director is paid a Director’s fee
A Dividend/Salary is paid to shareholders.

Children by definition would mean Minors (Under the age of 18) and they cannot own shares in the corporation. However, they can be beneficiaries of a Trust, where the Trust owns the shares of the corporation.

Creditor proofing is a Tax strategy to use multiple corporations such as an operating company and holding company working together to protect financial claims against the corporation.

To accomplish this, pay dividends from an operating company to a holding corporation.

Yes, non-residents of Canada can be directors of a corporation. Ontario and British Columbia allow 100% of the directors to be non-residents. Other provinces require at least 25% of the directors of a corporation to be residents of Canada.

Yes, non-residents can be shareholders of a Corporation. They can own a part of the corporation or 100% of the shares of a corporation.

CCPC stands for Canadian Controlled Private Corporation and is a corporation that is incorporated in Canada and controlled by Canadian residents.

This is important because CCPC that have any active income pay a low corporate tax rate starting from 12.2% on profits.

A corporation is a separate legal entity which means by incorporating you are creating a layer of protection. If and when a corporation is sued, then your personal assets will not be at risk. The maximum loss will be limited to the assets of the corporation.

Combining a Holding company with an Operating company can eliminate even the exposure to the operating company.

A professional corporation (PC) is a special corporation which allows professionals such as Lawyers, Doctors, Dentists, Realtors, and Accountants to provide their services to clients by tapping into the benefits of a corporate entity.

We at CapexCPA can incorporate professional corporations..

A Personal Real Estate Corporation (PREC) allows real estate agents to have their commissions paid to a corporation. We, at Capex CPA, can incorporate a PREC. See https://capexcpa.com/real-estate-prec

This depends on what your Total Sales are. If your sales are above $30,000 a year then your corporation requires GST/HST registration which is mandatory.

Please note that some goods and services are exempt from GST/HST (e.g. Medical Services, residential rents).

Please note that services provided to clients outside of Canada are zero-rated but are still subject to reporting GST/HST returns.

The incorporation process is needed to provide name protection to your business which is helpful in branding and marketing efforts. Moreover, it’s important that you consider also securing the web domain for the incorporation you would like.

You can add or delete investors very simply by releasing more shares from your corporation. We will create special preferred shares in your articles of incorporation which are designed for investors. This leaves control in your hand and dividend profits to be paid out to preferred shareholders (investors) before common shareholders.

Yes purchasing real estate using a corporation such as vacant land, commercial property or even rental property is recommended.