Choosing the right corporate structure is one of the most important decisions you can make when starting a new business. With the correct structure your new company will not only increase its potential, but will also improve taxation methods and protect personal assets.
There are a variety of different styles of corporate structure and picking the right one for you depends on your company.( For more information on these visit the company registration page) But what are the important factors to consider when choosing the right business structure?
- Personal Assets: One of the main points is the protection of personal assets. You can keep your personal identity separate from business identity by incorporating your business or forming a co-operative or limited liability company (LLC). With these business structures, corporation shareholders or the co-operative/LLC members could only lose the money they put into the company.
- Taxes: For some, such as partners and sole proprietors, the profits and losses of the company will pass through personal tax returns. For corporations they will be taxed, and then taxed again when distributed to shareholders. This can be avoided when registering as a co-operative or S Corporation.
- Uninterrupted Business: Some company structures, such as sole proprietorship, will end when the owner dies or retires. Other company formation styles will enable the continuation of business, despite the issues of managers and shareholders. The ownership of the company will be transferred without disruption to business operation.
- Capital: Certain styles of corporate structure may help with funding. Investors are more likely to look at corporations where the there is a separation between business and personal assets.
We call this the ‘Sleep Easy Factor’. And we believe our clients share the same concerns.
To start the business or acquisition, a proper agreement regarding the corporate structure, trust, and shareholder’s responsibilities has to be signed. And as a business starts to run, contracts and agreements will be needed for hiring employees, purchases, leases and funding. We guide clients through this legal process and help acquire and review all legal documents necessary
in order to put our clients on the safe side.
Accounting regulations differ in each country and province, and various tax incentives are provided for different industry. We analyze government programs and incentives on taxation in attempt to save and thus increase profits. We also review returns to make sure nothing is erroneous.
For every particular company, our consultants also review trusts, jurisdiction, and the calculation of income and expenses to ensure the lowest possible taxable income.
Personal tax is also important when it comes to acquisition, setting the correct relationship between you and your company will give you the benefit in tax returns.
Our consultants conduct due diligence in the start-up or acquisition process, especially on areas that are easily omitted in business purchasing, environmental concerns are one good example. The land and raw material a company uses, and the by product in manufacture businesses could possibly be affected by environmental changes. For example, pollution of land could make the property decrease in value, and certain regulations could be called that affect environmental polluting industries.
As experienced business people, we emphasize business risk aversion, and so should you. It is a small effort to make everything right and get your business and yourself protected against events of huge losses. Speak with our consultants today and find out what potential risks your business is prone to, and learn how to protect yourself at the minimum cost.
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At Winflow Financial Group, our consultants help entrepreneurs with our experience. Tell us about your business or investment today and find out how we can help your business save money and grow.