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When an entrepreneur is ready to create their corporation in order to move forward with their business plans says Edmonton bookkeeping, they should keep in mind what the benefits of using a holding company are. Their accountant might bring up the possibility of using a holding company for their business. But ultimately, all the entrepreneur here is how it is going to force them to file to corporate year ends, thereby increasing the cost of their accounting and Edmonton bookkeeping. Before a business owner discounts this corporate structure, they should understand truly what all of the benefits are before making their decision so that they can make the best decision for themselves and their business.

In order for a business owner to completely make this decision with all accurate knowledge, they need to understand what a holding company actually is. This is a corporation whose sole purpose is to own another corporation. Rather than the business owner owning shares in a corporation, this corporation does that, making the business owner an arms-length shareholder to the corporation. Even though it is the sole purpose of holding company, the holding company might also such as buildings and real estate, stocks and bonds, patents, and trademarks. The holding company can earn money this way from buying and selling assets, but also through profit shares, as well as charging for management services particularly from the operating company says Edmonton bookkeeping.

Once they understand what a holding company is, a business owner should understand what the benefits are. Ultimately, one of the biggest reasons to have a holding company is to create tax savings. One of the ways that an entrepreneur can use tax deferral in their business, is by funneling the prophets of their operating company to their holding company says Edmonton bookkeeping. As long as they are both Canadian corporations, a business owner can do this completely tax-free. Once the money is in their tax-free, a business owner and their accountant, as well as Edmonton bookkeeping company, can strategize the best way to withdraw these funds to minimize taxes. Or, they can simply invest that money on behalf of the business owner so that they do not have to take dividends out of the company which would result in up to 48% taxes being paid on that entire amount.

One of the most significant reasons why business owners are driven to own of their own business is to take advantage of wealth management strategies. Therefore, this is one of the ways that they can do that. Therefore, the Edmonton bookkeeping company recommends that entrepreneurs who are looking at wealth accumulation sets up their corporate structure to have a holding company. By utilizing this, entrepreneurs can plan how to distribute the prophets of their business so that they can exponentially increase their wealth, and grow their business. By doing this, business owners will not only have more money to invest in their future but also have more money in their business that can help them increase their business and succeed.

Edmonton Bookkeeping | Protecting Assets Using A Holding Company

Business owners may be told from their accountant that they should consider setting up a holding company as part of their corporate structure says Edmonton bookkeeping. However, many business owners are not sure why says beneficial, and they are aware that is going to cost them more money to file two year ends. Because of the cost associated with it, many business owners decline this corporate structure without understanding how much you can actually save them in taxes as well as all of the other benefits that come with it.

In addition to being able to demise taxes, there are many benefits that business owners can get from utilizing a holding company. One of the most beneficial aspects of this corporate structure aside from minimizing taxes is reducing their risk. Edmonton bookkeeping says many business owners are aware that corporations will limit their personal liability by shouldering that liability in the corporation, however, there is other ways that business owners can be at risk. By using this corporate structure, entrepreneurs are also able to protect their profits as well as their assets.

By transferring they prophets of their operating company to their whole holding company, not only is this tax-free says Edmonton bookkeeping but once a business owner has transferred their profits into a different corporation, this effectively protects those earnings from creditors as well as liability claims. This way, no matter what happens to an entrepreneur’s business, the assets and their profits can remain intact, inside the holding company.

While reducing their risk is one of the biggest benefits to having a holding company outside of tax minimizing, it can also be beneficial for a number of other reasons including being able to concentrate their assets, using it in succession planning, and being able to accumulate assets.

One of the most important things that business owners needs to be aware of, however, is both corporations need to have separate year-end filings, and so they need to ensure that they are speaking to their Edmonton bookkeeping company about both corporations.

Not only is it important to ensure that they have to separate year ends, but in fact it is very important that their Edmonton bookkeeping company is working on the financials for both corporations on a regular, monthly basis. This way, a business owner can ensure that there ending up with accurate and up-to-date financial statements to use in making fiscal decisions in their business. Also, by ensuring that they are up-to-date on a month-to-month basis can help ensure the accountant has accurate statements to complete the year-end, saving a business owner time and money.

By understanding the reason behind a corporate structure of a holding company and an operating company, as well as the benefits can help a business owner make the decision on what corporate structure is right for them, so that they can focus on all of the activities they need to grow their business.