What do I have to do to operate a business?
There are several issues to consider when starting a business,
such as incorporating, registering a business name, partnerships,
GST and sales tax.
Why incorporate?
There are several advantages to incorporating a company. The main
reason that people incorporate is to avoid being sued personally
when business dealings go bad. If your business is not incorporated,
you will be sued personally.
Another reason to incorporate is to
reduce the amount of income tax that you have to pay. Corporations
pay a lower rate of income
tax than individuals. Also, a company can pay money to
family members instead of the operator, and the persons who
receive the income
pay tax on it, often at lower tax rates that the operator
of the business.
Incorporating also makes it easier to
pass the business on to family members when the owner of the
company dies.
Incorporating is often advantageous
when there are two or more people who own the business.
Incorporating
allows
for a more defined
relationship and sharing of control of the business
and of profits.
Companies can be used to operate a farm,
a family
business or simply
own a piece of property.
Companies can be used to pass
assets on to children and minimize the amount of income tax
that must be paid at
death. How much does it cost to incorporate?
My fee for incorporating a company is $400. The fee that must be
paid to register the company is $330.
How long does it take to incorporate a company?
A company can be incorporated in one day.
What if I just want to use a name for my business?
If you want to operate a business other than in your name, you
must register the name with the Ministry of Consumer and Commercial
Relations.
Do I have to charge GST on my invoices?
This depends on the amount of sales that the business will generate.
If it is above a certain amount, you are required to collect GST.
If you are required to collect GST and you do not, you will still
have to pay to Revenue Canada the amount that you should have collected. |
