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Collins & Co Chartered Professional Accountant Victoria BC www.collinsco.ca

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cpacanada.ca
MEMBER
Chartered Professional Accountant

We see
more than numbers.

Incorporate?

     
  Prior to deciding whether to incorporate or not, Collins & Co. will:
  • Determine what will happen to your current business losses and future profits.
  • Determine what business assets and goodwill to transfer to the corporation.
  • Choose a fiscal year end or calendar year end and when to incorporate.
  • Develop a mix of salary, dividends and bonuses to be paid to yourself and others.
  • Assist with set up of company books, records and government filings.
  • Facilitate management decisions towards a successful business.
 
 

Pros

Cons

Proprietorship
  • Easy to start
  • Low start-up costs
  • Low regulations
  • Owner controls decision making
  • All profits to owners
  • Tax advantages
  • Minimal working capital
  • Business losses can be claimed on
  • Personal Tax
  • Unlimited liability
  • Difficulty in raising capital
  • Higher taxation rates with higher income
  • Lack of continuity
  • Business reliance on self
  • May be difficult to sell
Partnership
  • Easy to start up
  • Low start-up costs
  • Additional sources of capital
  • Tax advantages
  • Limited regulation
  • Broader management base and complimentary talents
  • Unlimited liability
  • Difficulty in raising capital
  • Divided authority
  • Suitable partners may not be available
  • Conflicts between partners
  • Partners can legally bind each other
  • Lack of continuity
  • Profits are smaller per share
Corporation
  • Limited liability
  • Possible tax advantage
  • Ownership is transferable
  • Continuous existence
  • Specialized management
  • Separate legal entity
  • Easier to raise capital
  • Capital gains exemptions
  • More expensive to set up
  • Closely regulated
  • Extensive record keeping
  • Dividend taxation
  • Shareholder liability
  • Personal guarantees can undermine limited liabilities
   

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Home | Contact | Why Choose Us? | Services | Record Keeping | Incorporate? | Financial Control | Getting Started | Business Plan | Income Tax Checklist | Links | Privacy

Collins & Co Chartered Professional Accountant Victoria BC
www.collinsco.ca
Serving the accounting needs of the Victoria BC Business Owner since 1989

Call us for a free 1/2 hour confidential appraisal before you buy, sell or expand a business.