Incorporation in Canada | 15 Secrets the Taxman Doesn't Want You to Know Vol III

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Incorporation in Canada | 15 Secrets the Taxman Doesn't Want You to Know Vol III

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Pros and Cons of Incorporating Small Business | 15 Secrets the Taxman Doesn't Want You to Know Vol III
To Incorporate or Not to Incorporate. That is the question
if you own a business, you have a chance to change the tax rule
and pay much less tax compared to an employee.
Is this a myth or a fact?
In today’s video, we will explore:
- the benefits of having a corporation
- Do you want to go into Sole Proprietorship, Partnership, or Corporation?
- What are .ltd, .inc. corp
- And What kind of tax advantage you have a limited vs unlimited liability company?
- What is CCPC, Canadian Control Partner Corporation?
📕 Book link: www.amazon.ca/...
📂Type of Corporations: www.canada.ca/...
#incorporation #incorporateincanada #selfemployed
1:05 Reason to incorporate
2:05 Unlimited Liability Company
2:35 Pros and Cons for Sole Proprietorship, Partnership
3:37 Limited Liability Company
4:13 CCPC Canadian Control Partner Corporation
5:00 Pros and Cons of CCPC
Enjoy!
DISCLAIMER: These videos are for educational purposes only. Please talk to professionals for your own tax plans.
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Thomas is a 10-year veteran advisor in the insurance and investment industry. He understands the life stages and challenges that people are going through. Therefore, the purpose of this channel is to bring awareness to the importance of financial education. No matter what age group you are in, knowledge has the potential to unlock wealth.
Better Mindset | Better Life!
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Mail｜thomaschan@novellawealth.com

Пікірлер: 84

@ThomasCChan 4 жыл бұрын

And don't forget to check the previous parts of the video: Vol I: How to lower taxes in Canada: kzfaq.info/get/bejne/erFggsaLsc7eonU.html Vol II. The best tax-Free Account (Not TFSA): kzfaq.info/get/bejne/l52ep8uV162dZY0.html

@kamalpantalia7694 2 жыл бұрын

Thomas this is a great video! You make a difficult subject easy to understand and your information helps different types of learners. My mom shared this video with me. I have subscribed and look forward to learning more. Thank you 🙏

@ThomasCChan 2 жыл бұрын

Glad you like it! 😃

@ahamedularefin9426 Жыл бұрын

Your illustration is Super good

@ThomasCChan Жыл бұрын

Thanks ahamedul. Please share to your friends too!

@tarvinder91 Жыл бұрын

Came across ur video and there is a lot of good stuff here

@ThomasCChan Жыл бұрын

Yah!! Glad you like it!

@LanguisticSchool Жыл бұрын

Wow! Great information, Thomas. Really helps with planning! If you incorporate federally, do you have more opportunities for grants from the government, or will you still have opportunities for federal grants if you incorporate provincially?

@ThomasCChan Жыл бұрын

Hello. I think you have to incorp both . Like you cannot skip provincal

@LanguisticSchool Жыл бұрын

@@ThomasCChan I know you cannot skip provincial, but if you go the provincial route, will the federal govt still be open to giving you grants?

@ThomasCChan Жыл бұрын

@@LanguisticSchool that's a very good question. Because from what I know. You do receive. As you are part of the federal once you reg

@goodnamesareallgone1 Жыл бұрын

@@ThomasCChan I thought (in Ontario at least) you could incorporate either provincially or federally. Federal incorporation gives you slightly better name protection, but you need to file both federal and provincial taxes -- added tax prep expense as opposed to registering provincially.

@gilbertfoelscher1086 3 жыл бұрын

Best video I found online

@ThomasCChan 3 жыл бұрын

Thanks Gilbert!

@justinmanning 3 жыл бұрын

Thank you, Thomas.

@ThomasCChan 3 жыл бұрын

You are welcome Justin! and cool name you have lol where are you based?

@cottoncandy2503 2 жыл бұрын

thank you! so helpful

@ThomasCChan 2 жыл бұрын

Glad you like it!

@sylviebigger4939 6 ай бұрын

Hey Mr Chan ive just researched saying that corporation cant be used for capital gains if they are sole propriator.. hus and wife would no longer be eligible

@TheAndy135790 3 жыл бұрын

Thanks for the great video. I some questions. 1, If the company has a net loss does it still pays the 50.67% tax on interest earned? 2, What type of incomes are subject to this 50.67% tax? All passive income? What about rental income or stock appreciation? 3. Can you link the CRA page about this tax? Thanks in advance.

@ThomasCChan 3 жыл бұрын

Great question! Any passive income such as rental income, interest income. Will have to be tax at 50.67% and also decrease the small business deduction room after 50k of passive income For details you can check; www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2018-equality-growth-strong-middle-class/passive-investment-income/small-business-deduction-rules.html

@LetsPhilosophize101 Жыл бұрын

Awesome content!!! Is it worth putting a corporation in a trust fund? Thanks

@ahamedularefin9426 Жыл бұрын

Thanks bro

@fanglu1623 11 ай бұрын

Is self employed people the same? Got expense deducted first , then be taxed 😊

@ThomasCChan 11 ай бұрын

You got it!

@alaa13666 2 жыл бұрын

It’s called a limited liability company not a limited company. One word makes all the difference

@harlemespanol 2 жыл бұрын

Wow! Amazing video, Thomas. Very informative. What is the tax rate on stock investments for sole proprietorship? Can you put your investments in a TFSA?

@ThomasCChan 2 жыл бұрын

Stock investment is still in personal side. So non reg is 50% of the profit will consider tax portion and add towards total tax income. Yes you can out investment in tfsa to avoid tax. But there is no corp own tfsa just to be cleared=

@harlemespanol 2 жыл бұрын

@@ThomasCChan Thank you for your insight. Please keep the great content coming.

@huyduong5716 2 жыл бұрын

Hi Thomas, in order to pay yourself as dividends, does your business need to be listed as a public trade company? And the company need to be qualified to be listed?

@ThomasCChan 2 жыл бұрын

Because there are two kinds. Eligible and non eligible and they have different tax treatment. So in short. No your company no need to be publicly traded

@sagarsmenon 3 жыл бұрын

Can you explain tax implication and expected tax deductions for incorporated employee (PSB),

@ThomasCChan 3 жыл бұрын

hi sagar, what is PSB?

@onyemanwalegu 10 ай бұрын

Is there a way to get a one-on-one with you? I’d really appreciate that.

@ThomasCChan 10 ай бұрын

I think you just did! Haha See you in one on one meeting!

@onyemanwalegu 10 ай бұрын

@@ThomasCChan yeah. I saw the link on the next video I watched. Good job man! See you Thursday!!

@hakamsingh4679 Жыл бұрын

Thanks for such a nice video Thomas. I have question regarding incorporation, So if i put a capital of say 50k early this year and thereafter using that i earned a profit of 30k. So now incorporation has total of 80k standing in the account. Can i withdraw that 50K without into personal without any tax liability?

@ThomasCChan Жыл бұрын

Hi hakam. It depends how you delcare that 50k. As a loan? As an income. Your accountant able to answer that question. Better

@harlemespanol 2 жыл бұрын

Hey Thomas. Can you write off unsold inventory? For example, I purchase 100 hoodies and I only sell 50 hoodies for the year, can I write of the remaining 50 hoodies?

@antisoc1al 3 жыл бұрын

Hey so I'm not sure what would be best for me. I'm a QA Analyst/Engineer, more and more companies want to hire people like me on contract and they require me to be incorporated. My pay rate would be around 50 dollars an hour which is roughly 100k a year. Which would be better for me? Unlimited Liability or a Limited Company?

@ThomasCChan 3 жыл бұрын

Hi Hulk. See if you can talk to a co worker. See what what's their plan. Or you can have a chat with me. I can walk through the step with you. www.thomascchan.com/thomas

@stephblank8204 3 жыл бұрын

Would love to know what he suggested as I’m in the exact same boat.

@ThomasCChan 3 жыл бұрын

@@stephblank8204 Hi Steph, in short, usually, if you make more than 80k or more as a self-employed, it's probably a good idea to incorp.. as you have a better position. but please have a chat with an accountant to calculate the exact number

@stephblank8204 3 жыл бұрын

@@ThomasCChan thank you

@ThomasCChan 3 жыл бұрын

@@stephblank8204 You are very welcome!

@jacobscreek1681 2 жыл бұрын

Hey Thomas, A company is asking me to work for them as an Independent Contractor & they would be giving me 50$ per hour , Now my question is Shall I go for Sole proprietorship or get an incorporated business thing , Also if I go for sole proprietorship then CAN I HAVE THE TAX BENEFITS LIKE OFFICE SPACE EXPENSES , VEHICLE EXPENSES, pLEASE GUIDE ME

@ThomasCChan 2 жыл бұрын

Hi Jacob! Besides for the tax perspective, where do see yourself in 2 years 5 years? Do you have anything thing to buy like house or car. Etc etc Feel free to have a chat with us. www.thomascchan.com/thomas

@jacobscreek1681 2 жыл бұрын

@@ThomasCChan yes, car i have to buy it immediately and house also, please suggest the best coarse of action

@ali1t Жыл бұрын

You would need to consider if they're your sole client, or if you have other clients. Like Thomas says the house always wins, so the CRA will see it as a personal service business if your only client - then you may have an issue and end up being taxed the same as if you were to file it without incorporation. Considering your circumstances, if you plan to grow the business it might prove ideal to incorporate to start bringing in assets into the company with more favourable benefits.

@MowSow 2 жыл бұрын

Really one of the best videos I have seen on the topic!! I am a pharmacist working with 2 relief agencies as a relief pharmacists, I also have a permanent part time hospital job on salary. Do I incorporate to benefit from the lower tax on my relief work under federal or provincial? I’m only licensed in Ontario. Thanks

@ThomasCChan 2 жыл бұрын

Hi M.serry. it theory yes but it really depends on the nature of your industry. As in is allow? Coz I know some industry prevent you from doing it. Best to ask the tax lawyer in your industry

@waveume4217 2 жыл бұрын

Hi thank you for the video. It was very helpful. I was doing research for my school project. If possible could you please tell me what are the different types of taxes a small candy making business say registered under CCPC will have to pay and what are different incorporation and registration fee for initial set up? I don't know how to search this information. If you could guide me that would really help.

@ThomasCChan 2 жыл бұрын

Hi wave! Let's see Assuming the small candy making business make $1 million a year revenue. Expense is $500k So the income $500k. So they will be taxed 11-13% tax bracket small business deduction. For inital cost. It depends which accountant or tax lawyer to set it up. I will say the market price is around 2k to 3k to setup everything. And each year you need to pay a book keeping fee.

@waveume4217 2 жыл бұрын

@@ThomasCChan Hi Thomas, thank you taking your time and responding to my questions. This information helps. I just wanted to have references which indicates that the set up cost. I am doing this for my school project and if I could have some links for references that would help. Lemme know if you know any. But yeah thank you once again. 🤗

@dddsisters7720 3 жыл бұрын

Hi Thomas! Thank you for sharing this. I want to start a small trading business for small items, do I have to register for sole proprietorship? Is there a scale of how small a buy and sell business required to register? I hope you can give me advice, I just dont want to violate Canadian laws and I am also not sure if starting a small business will work for me. Thank you! ☺

@ThomasCChan 3 жыл бұрын

Congrats on moving to start your business. It takes lot of effort to build one Now because I am not entirely sure what's your business and how small is small in your definition I will say most of people who wants to start a small business is through incorporation. Under the ccpc It has the tax advantage. To me small business is not really that small (Employee less than 100) More than happy to chat with you in detail through email thomaschan@novellawealth.com

@dddsisters7720 3 жыл бұрын

@@ThomasCChan Thank you for the insight. I am planning to start a buy and sell business like ordering in bulk from China wholesaler then selling it here. I am not planning to employ other than myself for the very near future unless it grows. ☺

@raquelbeals6198 3 жыл бұрын

Diary of Basement Kids way to go!!! Hoping for the best for you

@mykotron 2 жыл бұрын

This was helpful. Thank you. If I have hope that my business will grow from a small online media company (which also has an online store) to a larger online media company. Could it make sense to start as a Sole Proprietorship and then move to being an Incorporated or Limited company? Or should I just start as an Incorporated?

@ThomasCChan 2 жыл бұрын

I think it depends where do see your self in the next 2-5 years. How much revenue you bring in How much income you need as personal expense.

@mykotron 2 жыл бұрын

@@ThomasCChan honestly… I think an online media company could go either way. I have a somewhat decent following on FB as a page (40,000 followers) but when I launch my website I’m not sure how successful it will be. Most people attempting this kinda fail. What if all that ever happens is I sell a few t-shirts and get a few clicks per article/video? Also I don’t have much of a budget for an accountant etc. I’m building this with what I have leftover from my salary every payday. Kinda makes me think I should start as just sole proprietorship. See what happens…? If it’s successful then start an incorporated or limited company? Sound reasonable?

@mykotron 2 жыл бұрын

@@ThomasCChan thanks for your response!

@ThomasCChan 2 жыл бұрын

@@mykotron no rush in deciding incorporation or not. Just get into the industry. And get a chance how you like it. Then when your business is making money hire an accountant to see incorp make sense 😃

@mykotron 2 жыл бұрын

@@ThomasCChan thank you… so are you saying I should get sole proprietorship and incorporate later if necessary? Or just don’t create a business til I have my site, etc? I have my business name reserved at the moment…

@knitinkumar5392 6 ай бұрын

Thomas I have enrolled inc in my name as a Physiotherapist . I pay myself in my personal account, with the personal acc can I contribute to FHSA ?

@ThomasCChan 6 ай бұрын

Yup fhsa is a personal account. And it can help you reduce your personal income

@knitinkumar5392 6 ай бұрын

@@ThomasCChanThank you Thomas

@tomasnunezdelacruz4331 2 жыл бұрын

I need help with my small coporation business tax

@ThomasCChan 2 жыл бұрын

Hi Tomas. If you need help with the tax side pay roll and book keeping, then accountant will be best route. If you are looking for strategies to reduce tax or wealth transfer. Feel free to have a chat with us www.thomascchan.com/thomas

@har5590 3 жыл бұрын

Hey bro I have a numbered company it is an incorporation as the company name ends with inc. and I drive a truck and I do get hst and have a corporation account n payroll account pay cpp n ei at the end of the year so does that mean I’m in the ccpc category?? And also one more question is the hst/gst that I get is on my corporation account or payroll account ?

@ThomasCChan 3 жыл бұрын

Hi H ar. Base on the info given, it sounds like you are incorp as the ccpc. However I will recommend you check with your accountant or the person who help you set up the company. And hst is on your corp account.

@MrPatizi 2 жыл бұрын

Solid

@rachel_geller2023 2 жыл бұрын

Hi, I’m a sole proprietor and want to convert to incorporate but my accountant is against it. I just was to separate my home ownership And other personal ownership away from liabilities. Is it possible

@ThomasCChan 2 жыл бұрын

It depends because If cra said your sole purpose to move asset away and the following year you call bankrupty for example. Creditor can still go after it. . So there are lots of moving parts to decide whether you want to incorporate

@asmongoldbald 2 жыл бұрын

what if i want to make a business/corporation that purely focuses on investment and trading to generate income?

@ThomasCChan 2 жыл бұрын

Best to talk to accountant to define your business status

@brahm.aggarwal 2 жыл бұрын

nice

@gameradoz 3 жыл бұрын

I have a small business and also trade stocks. Is it possible to move stocks from my personal cash account to my incorporation? Also is there any benefit to doing so if I have a capital gain over 100k as the tax rates seem to be the same.

@ThomasCChan 3 жыл бұрын

So yes you can use your corporation to do investment. However, two things will happen For every dollar you made on the investment, you get taxed at 52% also it might lower your small business deduction limit. Vice versa. Personal account have TFSA / Rrsp to do some tax sheltered. And even non reg. Half of the gain is considered income. There fore might not be paying 25% more

@gameradoz 3 жыл бұрын

@@ThomasCChan In my personal I have made a lot of trade so I think I will be taxed at 100% as income on those trades. In this situation would it be better to just keep the remaining of my holdings in my personal account?

@gameradoz 3 жыл бұрын

Also thank you for the fast response I have scheduled a call with you I look forward to our conversation!

@ThomasCChan 3 жыл бұрын

@@gameradoz I couldn't suggest which one is better as i need more info! Looking forward to talk to you in person! 😃