Let's talk about how to incorporate or get your business incorporated. If you've heard me talk before, you'll know that I'm a huge advocate for introducing a corporation into the structure of a business. Why? Tax benefits? Okay, so we won't talk about that in this blog post.
If you want to learn about the tax benefits of incorporation, please check out some of my other videos. But what I want to discuss with you now is how to get it done. So, the first step is to come up with a name. Next, you need to determine the date when the incorporation will take place. Additionally, it's crucial to identify the initial directors and shareholders. These are the individuals who will own the corporation.
It's essential to get this right from the start because currently, the company has no value. However, in six months, the company could be worth $1,000,000 if the right owners are involved. Therefore, we have a lot of work to do to establish the value of the company and introduce new owners in the future. This step requires careful consideration.
We also need to focus on the shared characteristics and attributes of each individual share class that will be included. For instance, you may be the controlling partner or owner of the corporation, and you may have individuals who lend money and want to be in a special class of shareholders. In this case, they wouldn't participate in the company's increased value, receive dividends, or have any control over the business. The decision would be entirely at your discretion as the controlling owner.
There are various ways to structure a corporation, and it must be tailored to your specific needs and those of your family. For example, you may want to include your children and other family members as shareholders to explore income splitting opportunities. Whatever your requirements may be, the incorporation plan needs to be personalized and well-documented, outlining the different share classes and rules of the corporation.
Therefore, I highly recommend working with your accountant and lawyer as a team to develop the best incorporation plan for you. This approach will help you minimize your taxes and protect your family's interests.
To ensure a seamless incorporation and maximize your tax advantages, we our team of accountants and lawyers can help. Their expertise will help you design a personalized incorporation plan that minimizes tax liabilities and safeguards your family's financial well-being.