Your operating company is profitable. Cash is building up. You are not personally spending all of the money the business earns. Your accountant, business partner, or another entrepreneur mentions setting up a holding company. The idea sounds attractive: “Move excess cash to a Holdco, invest it there, protect the money, and save tax.” But is […]
You built the business from the ground up. Your children grew up watching it develop. Now retirement is getting closer, and instead of selling the company to an outside buyer, you want the next generation to take over. It sounds simple: Transfer the shares to your children and let them continue the business. From a […]
A customer sends your business a $20,000 deposit today for work you will complete three months from now. Your bank balance increases by $20,000. Did your business just earn $20,000 of revenue? Not necessarily. This is one of the most common accounting mistakes made by growing Canadian businesses. Cash arrives, the bookkeeper records it as […]
Your business is growing. Sales have increased. More customers are paying invoices. Revenue finally moves past $30,000. That sounds like good news. But for many Canadian business owners, crossing $30,000 creates a tax obligation they do not notice until months later. The problem usually starts with a misunderstanding: “I only need to register for GST/HST […]
Your organization does not operate to make a profit. So which CRA return do you file? T3010? T1044? Both forms deal with organizations operating outside the traditional for-profit business model, but they are not interchangeable. A registered charity generally files the T3010 Registered Charity Information Return every year. A Canadian non-profit organization may instead have […]
You may have spent 10, 15 or 20 years building your business. Sales are growing. Customers are loyal. The company is profitable. You finally decide it is time to sell. Then the buyer’s accountant starts asking questions. Why does the revenue in the accounting system not match the tax return? Why are thousands of dollars […]
Running an incorporated business can create a dangerous illusion: the company earns the money, you own the company, so the money must be yours to use whenever you want. For Canadian business owners, it is not that simple. Your corporation is separate from you for tax and accounting purposes. If you transfer corporate money into […]
Running an incorporated business gives you more flexibility over how and when you take money from your company. However, transferring money from the corporate bank account to your personal account is not as simple as making a withdrawal. The money normally needs to be recorded properly as salary, dividends, repayment of a shareholder loan or […]
A business can be profitable on paper and still struggle to pay employees, suppliers, rent or taxes. The problem is often not a lack of sales. It is timing. Customers may take 30, 60 or even 90 days to pay, while payroll, loan payments and supplier invoices continue to fall due. A large tax remittance, […]
Most small businesses do not need a full-time Chief Financial Officer when they first open. In the early stages, the owner may manage the company’s finances with help from a bookkeeper and an external accountant. This arrangement can work well while transactions are straightforward, revenue is relatively stable and the owner can still understand the […]