A new guide has just been published by Éditions du Journal, written by columnists Ghislain Larochelle and Luc Audet, to help entrepreneurs make the right choice.
“Should I integrate? Ghislain Larochelle is asked this question regularly. However, the answer is not always easy to find. To help entrepreneurs make an informed choice, he signs a new guide with Luc Audet. Take over? the big question published by Editions du Journal.
“There are already books on the subject, but they are written in very technical language. We wanted to offer a guide that is accessible to all,” explains Ghislain Larochelle, real estate columnist. He is also the head of Immofacile.ca, a company that provides training and coaching to real estate investors.
“There is no magic number that determines when founding is a good decision,” he adds. There are several aspects to consider, including sales, but that doesn’t say it all. »
The authors initially focus on undoing some urban legends surrounding founding, including the fact that it allows you to pay less in taxes.
“That’s not always true,” says Luc Audet, a lawyer and management consultant who co-wrote the guide. It all depends on the activity and the type of income [passif ou actif] generated by the company. »
“There are several situations where the decision to incorporate is advantageous from a tax perspective,” he adds. For example, if the company generates more money than the entrepreneur or the self-employed person needs to live on, the foundation allows the surplus to remain in the company and lowers the personal tax rate. »
Even if starting an SPA doesn’t save taxes, the authors say it may be a good idea to take the plunge. In fact, the list of benefits is long, including the image of professionalism that incorporation conveys, protection of personal wealth, the ability to borrow on behalf of the company, distribution of profits among shareholders, estate planning and taxes, etc
“The guide is aimed at self-employed people and entrepreneurs, whatever their field of activity, not just real estate investors, even if some of the information concerns them directly,” stresses Ghislain Larochelle.
Onboarding is just the first step. After the company received its patent, there were still some decisions to be made and steps to be taken, which the authors detail in a section of their book.
“People go along with it and think it’s over when the process is more complex than it seems,” comments Ghislain Larochelle.
If you haven’t already done so, you will need to register the company on the withholding tax file at both levels of government, obtain their tax numbers (GST and QST), find a tax advisor to do the accounting and prepare the tax return for the SPA, fill out the “log book” , a legal obligation, etc.
“We also have to decide how we want to proceed with the transfer of money to the company,” explains Ghislain Larochelle. This is a strategic question that is often asked, and we address it in this book. »
The guide also addresses several issues related to the financial management of the incorporated company, starting with the various costs that need to be taken into account as well as the accounting system to set up.
Finally, we look at the three most common mistakes when it comes to founding a company, including neglecting the sustainability of the company. Indeed, as the development progresses, many decisions will have to be made that will affect the taxation of the company.
“We wanted to provide as complete a guide as possible for entrepreneurs to refer to when needed,” concludes Mr. Larochelle.
A book that will to find out about them the following points
- Why incorporate and take legal form
- After onboarding what to do to comply with laws and regulations
- How to manage money within the corporation, including its funding, various expenses, etc.
- Evaluate all tax and tax issues
- Expand onboarding to real estate and other opportunities
Some myths about inclusion
- Automatic incorporation means you pay less tax
- A registered entrepreneur is protected from lawsuits
- In a corporation, all shareholders are equal