Incorporating in Canada | Should You Incorporate Your Business In Canada?

The video you have been waiting for - a Canadian-specific discussion about whether you should incorporate your business.
We cover the liability and tax reasons for incorporation.
What revenue level makes sense to incorporate?
What are the advantages to incorporating?
When is it not a good idea to incorporate?
How much does it cost to incorporate?
How do you incorporate? Check out our article here: www.avalonacco...
You can also incorporate online:
Ownr (affiliate link): get.ownr.co/av...
Law Depot: www.lawdepot.ca/
Let us know your incorporation questions below!
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Website: www.avalonacco...
Facebook: / avalonaccoun. .
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FAQs
What Can I Write-off? bit.ly/EXPENSESCAN
Should I incorporate my business in Canada? bit.ly/INCORPCAN
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Should I offer profit sharing? bit.ly/PROFITSH...
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[@mst7186]

"It's a person under the law when you incorporate..." - that analogy was pretty good. Watched this video a couple times. Thanks for the 'couch talk'😃👏🏽. U got a new subscriber!

[@amyactivates]

This was SO informative! I'm really happy that I found this - I feel clear and finally understand whether or not I'm ready to incorporate :). Thanks for all the info!

[@AvalonAccounting]

Glad it was helpful. Tell your friends!

[@georgecharrier602]

Till my next windfall whenever that happens I do mean whenever

[@MarcusFred-wn3iv]

While trying to build passive income and prepare for retirement, It’s important to choose stocks that are expected to hold up in inflationary environments. To combat the negative effect of inflation, it’s a good idea to diversify your portfolio across different asset classes, such as stocks, bonds, and real estate, since this can help protect your portfolio against inflation. I have seen people making up to $800k in a month during high-inflation

[@BrunoLuke]

One strategy is to invest in assets that perform well during inflation. Another strategy is to focus on companies that have the ability to pass on price increases to their customers. It's also important to maintain a diversified portfolio. It may be a good idea to speak with a broker who can help you develop a customized investment strategy based on your individual goals and risk tolerance

[@MarcusFred-wn3iv]

@@BrunoLuke I used to manage my stock portfolio by myself, all that time I did not make any significant returns (but also did not suffer losses). Then out of nowhere 2008 happened, and I lost 50% of my savings in a very short period. That prompted me to hire an FA, Since then I have been learning a lot about the stock market and I have made up to $500k in returns

[@BrunoLuke]

@@MarcusFred-wn3iv Who’s the person guiding you

[@MarcusFred-wn3iv]

@@BrunoLuke credits to KRISTIN GAIL CUNNINGHAM, one of the best portfolio managers out there. she's well known, you should look her up

[@BrunoLuke]

@@MarcusFred-wn3iv Thank you, I just checked her out and I have sent her an email. I hope she gets back to me soon.

[@adambwhite]

Best video on the subject that I've seen yet!

[@AvalonAccounting]

Thanks Adam!

[@alanross2876]

If you sell products, what would you say is more protective: 1. Sole proprietor with product liability 2. Incorporated with no product liability

[@BoppityBoopy]

Thank you! Your explanation helped me to simply understand that now is not the time to incorporate.

[@AvalonAccounting]

Glad it was helpful!

[@yellowxpurple95]

THE best and clearest video on this subject matter - thank you!

[@AvalonAccounting]

Wow, thank you!

[@phiguchi7889]

Very helpful. I knew all this from previous business classes but it was a great refresher!

[@fanglu1623]

Very helpful video. Thanks. I have a question about the personal service business under corporation and i have learned that the small deduction rule doesnt apply to it. Is CRA strict on this kind of business ?

[@AvalonAccounting]

There are some indications that CRA will be targeting these in the future. In our experience it’s best to stick to the rules here because the repercussions of getting PSB wrong can be so severe - including double taxation.

[@fanglu1623]

@@AvalonAccounting Thank you for the reply. I guess many don't follow the rules. I know a lawyer who has a full time job; he also has a law practice (corporation) and he's only employee of it. If CRA audits him he will be in trouble. My previous employer helped a musician set up a corporation while the musician is the only employee of the corporation.

[@jonathancaballero9033]

I see Avalon is now in BC, is avalon is still doing work for Ontario residents ?

[@anshdhabhateja2842]

I am just starting a new activewear business by myself. Do I need to incorporate?

[@daniellebee9]

Very helpful! Do you have a video specifically about if Canadian KZbinrs should incorporate or accounting tips for new youtubers to set up their culture successfully? Should u have separate bank accts.

[@AvalonAccounting]

We don't have a specific video for that, but the same ideas apply for KZbinrs! Incorporating will still be dependent on where you see your channel going in the future and how much revenue it's generating (and legal liability, of course). Regardless, you should definitely keep a separate bank account and credit card for your KZbin revenue and expenses.

[@daniellebee9]

@@AvalonAccounting thank you I appreciate your response!

[@controller4hire]

@daniellebee9 Yes, Canadian KZbinrs should consider incorporating their channels as a business entity. This can provide numerous benefits such as liability protection, tax advantages, and the ability to establish credit and build credibility with potential partners and sponsors. Additionally, incorporation can help separate personal assets from business assets, which is especially important for creators who rely on their KZbin channels as a source of income.

[@usb7]

Joe, Thanks for vid !! Can you discuss about Quebec incorp How to bill Quebec clients with Ontario corp

[@FirstLast-xk6fd]

I recently learned that a corporation is given its own credit score in Canada, and this sounds appealing since sometimes peoples person credit scores aren't the best, how often does this come up when trying to borrow money, and will they always look at your personal credit score anyway?

[@controller4hire]

That's an interesting question! While having a good credit score for your corporation can certainly be helpful, lenders may still look at the personal credit scores of the business owners or guarantors when making lending decisions. It ultimately depends on the lender and their specific requirements. However, having a strong business credit score can definitely improve your chances of obtaining financing for your corporation.

[@schnabs1234]

Could you provide contract software development to a US entity with a Sole proprietorship?

[@sialee5926]

Hi -how & where do I register for a Sole Proprietorship in Ontario? I’m new at this. Also can I do this with a company called ownr? Thanks!

[@AvalonAccounting]

Hi Sia - yea Ownr is a good place to start. You may also be able to register it directly through the Government of Ontario website: www.ontario.ca/page/business/start/register-your-business-online

[@sialee5926]

@@AvalonAccounting thank you👍

[@DaveaCameron]

Hi! Is there a rule of thumb about the level of income at which it makes sense to incorporate (and to create a holding company)?

[@AvalonAccounting]

This varies a bit depending on the situation, but some people say $150K, others say $250K. I like to think of it as the point where you have more income than you know what to do with. You have maxed RRSPs, TFSAs and any other tax shelters available to you and are forced to take income that you don't need and pay high marginal tax rates. Of course, if you are building a business to sell one day and are fairly certain about its success you may want to incorporate earlier than this. For a holding company, I don't think there's an income number - it's more multi-factored than that. Hope this helps!

[@aprimzolo]

Very informative video, my son is a new real estate agent, do you recommend that he incorporate or just be sole proprietor, your reply is appreciated

[@kooskoos8181]

Cud u plz help me with starting a business on a reserve in canada. What is the best way to go Bout it cuz business conducted on the reservation is not taxed. Any info wud help! Thank u love ur channel!

[@cga73]

Hi your link to how to incorporate is not working....by the way thanks for your videos....been following you here on YT.

[@AvalonAccounting]

Thanks for watching and checking the link for us! The link should work now if you want to check out that article. www.avalonaccounting.ca/blog/how-to-incorporate-your-business

[@cga73]

@@AvalonAccounting thank you… I will continue in a bit and will also watch your other videos. I just lost lots of money for not knowing more about taxes…

[@travelingtam8638]

How can we register for incoperation?

[@AndrewEydt]

Very useful - thanks!

[@AvalonAccounting]

You’re welcome! Thanks for watching!

[@lianap1147]

Very informative! Thanks!

[@ahmedhussein448]

Hi there! Is the lifetime tax exemption ($180K savings) eligible only once per person ...per lifetime?

[@AvalonAccounting]

Yes, there's lifetime amount but it doesn't have to be used all at once.

[@AlpineDividends]

If I was planning to become resident of another country in the future, but am running a Canadian business now as a Canadian citizen/resident, and wanted that business to persist business as usual in Canada, earning Canadian dollars to Canadian accounts, regardless of my personal residency status, would incorporation be the better route? And if I was the only shareholder, but eventually moved out of Canada, could said corporation continue business as usual, if its only owner (me) becomes some sort of non resident (of Canada)? Or like, would I need to enlist a second, Canadian resident shareholder or something for the business to persist in Canada, while I also draw some salary or dividends from it as a non resident?

[@noel3551]

Hi Joe, just curious about the 900k tax free Capital gains program. Does this also apply to an existing business that I may purchase and are you able to walk me through an example if it does? thanks for the great content!

[@AvalonAccounting]

Hi Noel - essentially, if you buy the shares of a business today for $100,000 and grow that business and sell those shares for $1,000,000 - you would be able to do that tax free. Of course, there are quite a few technicalities to understand prior to selling, but that's the gist of it! Make sure to speak to an accountant or tax lawyer to set it up properly!

[@alicesilk]

Really helpful!!

[@ReneBold]

2:00 lifetime capital gains exemption

[@leandroricafort6878]

how much does your company charge as i started my corporate business but no acct. yet

[@AvalonAccounting]

Hi Leandro! Shoot us an email [e-mail] and we can set up a time to talk.

[@HardwoodFloorRefinishing101]

I recently incorporated after 11 years in business as a sole proprietor. Will I continue to use the same HST number I used for my previous tax years when filing taxes, or does this change to my new corporate number? Thank you.

[@AvalonAccounting]

You'll need a new HST number - you should have received a Business Number when you incorporated and your HST number will be a program account under this number.

[@Gul_Jee]

Great content thank you

[@AvalonAccounting]

You're welcome! Glad it was useful.

[@SagunGoel]

Hi Collin, really enjoyed your channel...I found it extremely helpful as these are the questions almost every small business owner has. May I please ask if you have recommendation for small business bank account as I find it a maze to go through the options available. Thanks in advance. Sagun

[@AvalonAccounting]

Thanks! It's really hard to give a blanket recommendation there, Sagun. We have found credit unions to offer really great personalized service, but big banks offer more in the way growth opportunity. We bank with CIBC, but the big banks tend to be pretty similar for small businesses.

[@AmyElizabethFrith]

Thank you .

[@adrenaline681]

Very informative. Does this mean that if I want to create a startup I can deduct expenses for the startup from the earnings of my main job? At least until I incorporate the business?

[@mikek2969]

I don't think that's correct. You can't deduct expenses from a different income stream. That said, tracking your expenses - especially HST/GST - helps bring down your burden at tax time.

[@selmansori]

Video is more than amazing. Extensive explanation in simple style. Thanks a lot for the video. :-)

[@AvalonAccounting]

Thanks! That means a lot!

[@AILAM43]

iS INCORPORATING ur business a LLC?

[@jordanmercier3616]

In Canada there are no LLC's, in the US they use LLC, S Corp, or C Corp. It's just called a corporation, the corporate extension is either LTD, INC, or Corp, and the extension you choose has 0 effect on how the corporation is handled. Whether you choose LTD, INC, or Corp, there's no difference it's just personal preference.

[@controller4hire]

The LLC arrangement for business ownership is not offered in Canada

[@animariani6768]

😢😢😮😮😮😅😅😅

[@c-shepard]

If your allergic to paperwork you shouldn't have graduated from high school. Instead of business, I recommend a career in Fortnite instead.

[@jeveuxpasdechainecal]

Since Trudeau gave himself the right to cease our corporate account if we do not agree with his "views", maybe should we just incorporate in another country.