An entrepreneur calls on us to help him carefully build his business from the ground up
In 2011, Jamie Delgado made a bold leap, and went out on his own as an engineering consultant. He’d attracted two promising contracts, and wanted to try his hand as an entrepreneur. He had multiple questions about what seemed like an overwhelming process. Meeting regularly over the period of a month, we handled them all.
Sole proprietorship, or incorporate right off the bat?
If you have your own business, you know this question well. There are many differences between the two, but when it comes to taxes, sole proprietorships include all of your earnings in your year-end tax returns, whereas incorporating allows you to leave any excess earnings in your business, where they’ll be subject to a much lower tax rate (13.5%). So when does it make sense to incorporate? Based on Jamie’s projected earnings, and the fact that we could set up share splitting with his wife and 20-year-old daughter, we advised him to incorporate.
What’s the best banking structure?
Jamie was going to be doing international business and wanted to be careful about setting up his banking accounts. We connected him to a trusted advisor at and internationally renowned banking organization, and helped him explain his needs for his business.
How does GST work, and how do I get set up to file?
This is where we started to really step in. We set up a GST account with the CRA directly, and created Jamie’s books, so that he’d be set up to file at the end of the year.
What do I do about bookkeeping, payroll, and other administrative tasks?
After creating Jamie’s books, we offered to either continue his bookkeeping ourselves, or train him and his wife on some easy-to-use accounting software to help them manage it themselves. They opted to keep us on hand for the first year, so Jaime could focus on what he does best – engineering. Today, Jamie’s wife has stepped back from working full time and is managing much more of the accounting and management of the business.
Jamie is flourishing, and we remain on hand to support him with whatever he needs.
Our advice to incorporate from the beginning has also paid off – for the past two years Jaime’s family has paid considerably less tax than in previous years.
Have a million questions about setting up your business? Come in for a free consultation.