At Swainson Alexander LLP we like to think of ourselves as everyday people helping others in the community with accounting and tax advice so they can do what they do best—run their businesses successfully!
Our team can work with you at all stages of your business development and provide the strategic support you need to be financially aware of how your business is performing—and what steps, if any, need to be taken. We have in-depth accounting and tax knowledge, plus industry contacts in the Red Deer legal and finance community to move you forward in the direction that serves you best.
So you are starting your own business in Red Deer... now what?
In general terms there are two avenues to consider – Incorporation or Proprietorship.
A proprietorship is a type of business owned by an individual. If there is more than one individual involved, a partnership may be formed. The net income of a proprietorship is taxed on the individual’s tax return. Like a corporation the proprietorship can deduct expenses related to the business revenue as allowed by Income Tax Act of Canada. Unlike the corporation which pays a lower tax rate, the proprietorship income is taxed based on the individual’s marginal personal tax rates. Keep in mind that the lower corporate tax rate still involves a 2nd layer of tax as the shareholder will receive salary or dividends which will be taxed at their marginal personal tax rates, so the combined corporate and personal income tax on corporate income in theory—equals the tax on the proprietorship income.
We would be happy to meet with you to discuss in more details the above considerations and other items like:
And any questions you may have….