tag:blogger.com,1999:blog-4402283548766807872.post2783685756006690657..comments2024-03-20T02:26:06.500-04:00Comments on The Blunt Bean Counter: Should You Transfer Your Sole Proprietorship into a Corporation?The Blunt Bean Counterhttp://www.blogger.com/profile/11358868550072516313noreply@blogger.comBlogger38125tag:blogger.com,1999:blog-4402283548766807872.post-215875878281859392017-08-29T20:48:29.110-04:002017-08-29T20:48:29.110-04:00Hi Unknown
I dont answer these type questions on ...Hi Unknown<br /><br />I dont answer these type questions on the blog as they are subject to many factors and you need to understand the client and the transfer details. Sorry. I would however, engage a financial planner or accountant for an hour to review your issue to ensure u make the best decision for yourselfThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-53751116571025454082017-08-29T19:58:41.704-04:002017-08-29T19:58:41.704-04:00Hello, Thank you for such a well written and infor...Hello, Thank you for such a well written and informative article. I'm about to commute my OMERS pension, and I also run a small business on the side. Before I commute could I incorporate my business, and then when it's time to commute transfer the commuted value into a LIRA, thereby deferring the tax? Is this is possible, or even worth it? It seems like a way to let these assets grow a bit longer while deferring the tax bite. Thank you.Anonymoushttps://www.blogger.com/profile/11704747978813068756noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-65355903165810195302016-03-07T13:38:16.437-05:002016-03-07T13:38:16.437-05:00Hi unknown
I would engage an accountant for help ...Hi unknown<br /><br />I would engage an accountant for help with your issues to ensure you do this properlyThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-40775119971745283422016-03-07T13:36:56.880-05:002016-03-07T13:36:56.880-05:00Hi there, two questions for you: 1) Are you able t...Hi there, two questions for you: 1) Are you able to transfer assets (such as a used vehicle) into your new corporation from your personal assets, simply in exchange for a liability from the company to pay you the fair market value? 2) What you suggest be the best source for learning about valuating goodwill, for example, from a 2 year old sole-proprietorship that is doing well selling their own natural products ($100,000 annually)? LeifLeifhttps://www.blogger.com/profile/11886208045432897771noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-56405405545397054162016-02-13T10:35:29.353-05:002016-02-13T10:35:29.353-05:00Hi Yzabelle,
This is a legal issue and unfortuna...Hi Yzabelle, <br /><br />This is a legal issue and unfortunately not up my alley. My understanding as a lay person is that if you incorporate, you can lose the name if it is already registered by someone else. However, you should see a lawyer or paralegal to get a definitive answer to determine your risk in losing the name upon incorporation and then u can make an informed decision.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-27201647170055427332016-02-12T18:14:04.684-05:002016-02-12T18:14:04.684-05:00Hi ! I just recently registered my business as a s...Hi ! I just recently registered my business as a sole proprietorship. I was wondering though, if I decide to incorporate my company, am I going to have to change my company name ?? Or am I able to transfer it over when I convert ? I'm kind of worried because I'm decided on keeping my business name and potentially apply for a trade name (DBA, O/A) . Anonymoushttps://www.blogger.com/profile/03239482511942594443noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-52208282094322582282016-01-19T18:20:59.111-05:002016-01-19T18:20:59.111-05:00Hi Phil
I don't provide tax planning advice o...Hi Phil<br /><br />I don't provide tax planning advice on this blog. That said, as noted above, the rollover is done in large part to ensure there is no deemed disposition of goodwill. If you have determiend it not necessary to do the rollover to protect against any deemed disposition on the goodwill and only have minimal equipment some accountants might suggest not to do the rollover for only the small amount of equipment.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-83332206063835456652016-01-19T14:33:24.922-05:002016-01-19T14:33:24.922-05:00Hi Mark, I've recently went through the the pr...Hi Mark, I've recently went through the the process of incorporating a sole prop. Trying to decide if its better to write down some property or pursue a rollover. The property consists of some home office furniture and a computer. What are you thoughts? What's easiest. Maybe its time for some new furniture?<br /><br />ThanksStruggling Artisthttps://www.blogger.com/profile/09409375549162609060noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-9132919949140724702016-01-03T11:00:21.423-05:002016-01-03T11:00:21.423-05:00Hi Jane
Yes there will be tax on the goodwill and...Hi Jane<br /><br />Yes there will be tax on the goodwill and assets sold. You should speak to your/an accountant who can review your situation and see if any planning can be done and how much tax will be owing.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-65768393256745274222016-01-02T16:41:13.754-05:002016-01-02T16:41:13.754-05:00What if it is too late to incorporate proprietorsh...What if it is too late to incorporate proprietorship. Our sole proprietorship was sold a month ago and we now are trying to calculate income tax on the sale. Is capital gains tax payable on the goodwill and the assets sold? Also can any of the capital gains be deferred. Anonymoushttps://www.blogger.com/profile/07227061748654810306noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-79707417428559204612015-11-06T13:46:02.279-05:002015-11-06T13:46:02.279-05:00Inc or Not
I do not provide tax planning on this ...Inc or Not<br /><br />I do not provide tax planning on this blog. Even if I wanted to, I would need way more facts. You need to engage an accountant to help you make this decision based on your specific facts. Based on your income to date, it is definitely worth at least considering. If you are in the Toronto area email me at bluntbeancounter@gmail.com and maybe I can assist you.<br />The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-6847780646079595352015-11-06T03:02:40.699-05:002015-11-06T03:02:40.699-05:00Hi Mark,
You've written a very persuasive art...Hi Mark,<br /><br />You've written a very persuasive article, and it has led me to more insights on my situation. If as a sole prop. I've made 6 figures in this calendar year (my second) would it be wise to incorporate? Also, can i think transfer the funds to the incorporation to pay appropriate inc. tax instead?<br /><br />The idea is to save on income, while still ensuring the Man gets some.Inc. or notnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-30495260460163436002015-10-05T13:43:58.763-04:002015-10-05T13:43:58.763-04:00Hi Anon
Sorry, I don't answer PST questions, ...Hi Anon<br /><br />Sorry, I don't answer PST questions, that is not my area of expertise.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-51146702535478978292015-10-05T00:55:25.809-04:002015-10-05T00:55:25.809-04:00Very useful information. I have a quick question.
...Very useful information. I have a quick question.<br /><br />If a sole proprietorship owns 200k in assets and wants to transfer all those assets to a corporation where the original sole proprietor is the lone shareholder (owns 100% of company), does PST need to be paid by the corporation when attaining the assets from the sole proprietor ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-59155474133551605322015-09-26T13:54:43.180-04:002015-09-26T13:54:43.180-04:00Hi Anon
I am sorry, but I dont provide specific t...Hi Anon<br /><br />I am sorry, but I dont provide specific tax planning advice. However, in general, when you transfer assets that were owned personally, they are typically treated as a capital contribution or in the case of an incorporated business, a shareholder loan and not a loss. The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-73744770981845091532015-09-25T22:38:39.144-04:002015-09-25T22:38:39.144-04:00Very informative!
I am a salaried employee and ha...Very informative!<br /><br />I am a salaried employee and have business registered as sole proprietor. I am in the process of starting this new business of importing garments to retail online under this sole proprietorship. I have 20K worth of merchandise that I would be transferring to this business and perhaps 40K in liquid for initial setup and operations. How would this 60K be accounted for when at the time of tax filing? If at the end of the year I have 15K worth of merchandise still in stock and had sale (not profit) of 10K ... my overall balance sheet including my salary and income from business might look like 60K(From Salary) + 10K (Sale from business) - 5K (Merchandise that got sold) - 30K (Setup Expenses such as website setup cost, monthly website charges, travel expenses for obtaining merchandise as hand carried goods, home-office use for stocking merchandise and fulfilling orders ..etc...). So with above numbers .... the amount of 60K that I transferred into business ...is that counted as loss for the year? Also ...the website setup costs and this initial stock of 20K would be there from before I officially started my business activities ...so what do I need to show to CRA to prove that the money spent for all of this and be counted towards reduction in my income for the year and the year before? I don't have a separate Business Name ...but the business is registered under my own name. So in the past all such expenses were paid from my personal account ....does that matter ...can I still claim all that as expense towards my business ..even though I didn't claim that in last 2 years ...ever since I started working on putting things together in terms of website and getting stock from other countries.<br /><br />Thanks, Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-67284080861603429972015-06-10T20:34:22.904-04:002015-06-10T20:34:22.904-04:00Hi Jason
You have to be careful to ensure the int...Hi Jason<br /><br />You have to be careful to ensure the interest on the loan is deductible. Thus, you first need to understand if the BDC would even allow you to transfer the loan and then speak to an accountant to ensure your loan interest is still deductible and you transfer your proprietorship and loan tax effectivelyThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-9077954936457766142015-06-09T18:53:43.571-04:002015-06-09T18:53:43.571-04:00Hi David,
Great post - thanks for the advice. I h...Hi David, <br />Great post - thanks for the advice. I have a sole proprietorship and recently received a BDC loan. I am considering opening a corporation in order to be able to apply for the many government grants that are applicable to my business. Would I need to transfer that loan over and close my sole proprietorship? If so, how will that work?<br />Thanks, <br /><br />JasonJasonhttps://www.blogger.com/profile/03061667625407774102noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-73665578916294303022015-03-07T10:23:50.496-05:002015-03-07T10:23:50.496-05:00Hi David
Sorry, i do not provide personal tax pla...Hi David<br /><br />Sorry, i do not provide personal tax planning advice on this blog. I will note however, that in general, unless you transfer assets with a hard cost base, you cannot transfer tax free and take out non share consideration.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-76131889530470617232015-03-06T21:51:53.727-05:002015-03-06T21:51:53.727-05:00Could you comment on the agreed amount. It becomes...Could you comment on the agreed amount. It becomes the proceeds of disposition for the sole proprietor. Can the sole proprietor attribute cost to the client list and have the best of both worlds, no gain on the disposition of the client list and the ability to take out no-share consideration? My brothers incorporated their farm, disposed of land to the corporation and they think they got a big advantage. (I am not their accountant.) I would like to dispose of my client list to my corporation and take a note payable for the accumulated costs of operations I have had in the last year. The rest of the FMV in will take in shares.david warkentinhttp://www.dwcga.comnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-19770871352177439002015-01-20T20:31:44.810-05:002015-01-20T20:31:44.810-05:00Hi Anon
Not sure, I never really looked at the is...Hi Anon<br /><br />Not sure, I never really looked at the issue. I would think they would be similar in pricing, but you would have to confirm that with an insurance agent.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-91145719565907163072015-01-20T12:28:40.053-05:002015-01-20T12:28:40.053-05:00Hi,
I was wondering if it is cheaper to get liab...Hi, <br /><br />I was wondering if it is cheaper to get liability insurance for a corporation when compared to a sole proprietorship.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-53903406127042320702014-05-13T15:13:28.962-04:002014-05-13T15:13:28.962-04:00Hi anon
That is legal question I don't know t...Hi anon<br /><br />That is legal question I don't know the answe for sure, sorry about that The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-44746444353787012992014-05-13T01:54:56.858-04:002014-05-13T01:54:56.858-04:00Hello,
If I wanted to "hold" a company ...Hello,<br /><br />If I wanted to "hold" a company name with the idea that I might form a corporation with others, could I register a sole proprietorship, have no activity, and then easily convert to a corporation with future partners involved?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-76095465880179861572014-03-20T16:59:34.941-04:002014-03-20T16:59:34.941-04:00Hi Anon
Definitely not, that is why there are not...Hi Anon<br /><br />Definitely not, that is why there are notice of objections and tax court. Now whether worth the cost and effort is another storyThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.com