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Why Do You need an Accountant to Incorporate Your Business?

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The world of investing for saving purposes can be complicated but it is not necessarily difficult. All it takes is some management and a little advice along the way. Everyone has their own needs and reasons for saving: kid’s education, buying a home making sure to have enough retirement income to last. Whatever your needs, there are different government saving options with different features to cater to your needs, accumulate savings, and encourage smart investments. One of these is the Registered Retirement Savings Plan (RRSP). 

RRSP Deadline for 2021 Tax Year

What happens if the RRSP deadline is missed?

If you are planning on incorporating your business in Mississauga or anywhere in Canada, one of the most important decisions that will take you in the right direction is to find the right professional accountant.

An accountant is well equipped with all the latest rules and regulations. Hence, he is in a better position to assess your individual and family tax situation and give you personalized tax advice and appropriate corporate structure. Once your accountant is aware of your tax situation, he or she can work out the exemplary business structure ultimately mitigating your tax burden. He will consider various factors for tax planning like income splitting with your family, who will hold the business control, and how much control every member should retain. 

Forming a Holding Company 

An accountant after thoroughly assessing your situation can advise you whether incorporation as a holding company will help you shield your profits. He or she can explain other options like setting up a family trust to help your corporation achieve more profits. 

Creating a Family Trust

The four main objectives of structuring a family trust when used in conjunction with a corporation are:

  • Income splitting with family members through the trust
  • A tax-free transfer of ownership to the next generation
  • Sustain control of the corporation with the founders.
  • Cut down estate taxes

When a corporation introduces a family trust, the value of the business must be evaluated by a valuator. This value is accredited to the founder’s utilizing special shares (usually an estate freeze). This authorizes the beneficiaries of the trust to benefit from the future growth of the corporation.

Establishing a family trust is far more complicated and a detailed process than it looks like in the above paragraph. Before further pursuing a family trust in conjunction with a corporation, take on board a professional accountant in Mississauga to have an expert’s eye on the whole process and get some valuable advice.

Maintaining your minute book

A minute book is a collection of important documents that prove the status of your business as a legitimate corporation. The typical components of a minute book are:

  • A certificate of incorporation
  • Corporate bylaws
  • Director, officer, and shareholder registers
  • Share certificates 
  • Company structure
  • Minutes of meetings

It is mandatory to update your minute book after every annual meeting, or else you could face some significant penalties. Hiring an experienced accountant is one of the best investments you can make to avoid any unnecessary fines and penalties. He or she can professionally maintain your minute book and ensure everything is organized and updated and protect you from tax authorities. If you need further details about the minute book read my article “Incorporation Services in Mississauga”.

There are several factors to consider when deciding to incorporate your business. If you are still uncertain about incorporating your small business, our experienced and professional team at Filing taxes is here to set you on the right path considering your personal business situation. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer:

The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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