Business Start Up Consulting
Business start-ups require much more than just financing and cash flow. And when it comes time to incorporate, or create a partnership, things can get involved and complex. It’s when expert advice and professional counsel is most critical - a time to structure the business, establish the operating strategies, and ensure a viable long-term plan. At KBFP, an expert team of accounting professionals is poised to provide business start-up consulting for companies large and small.
Sole proprietors are fully accountable for legal obligations and debts. Although business profits belong to the proprietor, creditors can claim against business (and personal) assets. Regulatory encumbrances are few, income tax obligations are personal, and liability issues are also personal.
This structure is ideal for doing business with a partner, without incorporating. Business finances are combined; an agreement is established for the management structure and profit sharing; and liability issues are defined to protect the partners in the event of contract disputes and the like.
Businesses are incorporated on a federal or provincial basis. Incorporated businesses are legal entities, separate from shareholders. In fact, shareholders are not liable for any actions, obligations or debts of the corporation. Funds are extracted by receiving a dividend or a salary.
Salaries vs. Dividends
Salaries are deductible in a corporation, while dividends are paid from after-tax profits. Based on the corporate structure, a mix of salary and dividends is formulated to best suit the needs of the business. Tax rules and regulations further determine the most advantageous business approach.
Income splitting is designed to shift income from a “high-rate” taxpayer to a “low-rate” taxpayer. There are legislative rules and regulations (usually federal) that govern income splitting, as well as strict anti-avoidance provisions, so that tax avoidance is prevented, while the benefits remain.
Holding Corporations (limited liability companies or limited partnerships) own sufficient stock in a separate company to control policy issues and management decisions. A holding company is set up for the singular purpose of having control over another company, property, stock, or asset.
Family Trusts Plans
Family trusts are legally structured for the purpose of managing and controlling company assets (without owning the assets). Family trusts are intended to protect assets from creditors; transfer company shares to family members; and provide certain income tax benefits to beneficiaries.
When it comes to business start-ups, the team at KBFP provides viable business solutions for sole proprietors, partnerships, and corporations. The team specializes in tax compliance, income tax minimization, and optimization of financial performance - for both businesses and individuals. KBFP is proactive with every client. Our team simplifies the complexities of tax law, and provides comprehensive tax compliance counsel, so that business people can focus on doing business.
With independent, objective guidance from a professional accounting firm like KBFP, business owners can operate more efficiently and therefore more profitably. KBFP advisors offer start up businesses the type of top-level advice that makes for better short-term planning, and smarter long-term decision-making.