#Corporate and Business Tax Planning Services Calgary

[matrixaccountingcalgary]

Calgary Accounting & Bookkeeping Services

When it comes to Calgary accounting and bookkeeping services, there are several key services that businesses should be aware of. These services help ensure accurate financial records, compliance with tax regulations, and informed decision-making. It’s important to note that the specific Calgary accounting and bookkeeping services needed may vary depending on the size, industry, and complexity of a business. Consulting with an accounting professional or firm can help determine the most suitable services for your organization’s needs. Matrix Accounting is one of the reputable accounting firm in Calgary to deliver perfect accounting & bookkeeping services as per client’s requirements. Book a free consultation with experts today!

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ACCOUNTING SERVICES

Cloud Accounting

Benefits of Cloud Accounting

Easy Access to your Information

Less Paper

Manage your business from your phone  

We provide high-quality and customized accounting services. Our accounting services are entirely cloud-based, enabling us to serve clients the best corporate accounting services in Calgary. This also gives clients the ability to access accurate real-time data.

Providing secure ways of storing financial information, cloud accounting services promise reliability. Whether you’re a small business owner or you’re working with a larger company, our professional solutions empower business owners to achieve their goals in the best ways possible.

Currently serving various industries including construction, retail and service-based businesses, it’s safe to say we’re likely to have a solution that fits your needs.

Tax Services

As accountants, we offer a wealth of tax-related services. We believe that tax should be a simple, smooth and stress-free process. That’s why we focus on implementing the personalized plan you need to effectively address all your tax needs.

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Whether you’re looking for assistance with personal tax, corporate tax, payroll tax, or sales tax, our accountants for tax preparation services and solutions in Calgary are for you!

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So, whether you’re starting to dream about opening your own business or you have a pre-existing company that you’d like to scale, we have a tax solution for you!

Bookkeeping Services

Running a business is not for just anyone and it takes dedication, commitment and good decision-making to succeed.

Part of this decision-making is to decide when to bring on someone who can dedicate themselves to your bookkeeping so you can dedicate yourself to delivering the best results for your customers.

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At D. Knight we don't stop at compliance based bookkeeping but provide you with tools and insights that help you make better informed decisions.

Whether this includes introducing a brilliant software or providing suggestions on material markup, our mission is to make your work-life much easier.

[dknightconsulting]

Basic Understanding of Tax Brackets and Marginal Rates in Canada

A solid understanding of tax brackets and marginal rates is crucial for efficient tax return completion and effective financial management, especially when utilizing tax preparation services in Calgary. Canadian taxpayers aim to minimize their tax payments by staying updated on current taxation information.

As we step into 2024, individuals and businesses face both challenges and opportunities in the evolving tax landscape. This article aims to guide Calgary homeowners through the process of filing their 2024 tax returns while providing a comprehensive understanding of Canada’s different tax brackets and rates.

Basic Tax Concepts, Tax Brackets, and Marginal Rates

Tax rates in Canada vary across income levels, with each level defined by a tax bracket. The progressive taxation system means that as income increases, so does the tax rate. Within each tax bracket, the marginal rate applies to the last earned dollar, resulting in higher rates for those with elevated incomes.

For the 2024 tax year, the Canadian government has revised tax brackets and marginal rates to align with economic circumstances and fiscal policy goals. These changes impact all Canadians, including residents of Calgary.

Federal Tax Brackets and Marginal Rates for 2024

Total income tax paid by Canadians comprises federal and provincial components. While the federal government sets the general structure of tax rates and brackets, provinces and territories can impose additional taxes. Therefore, taxpayers in different provinces have unique tax obligations. Here are the federal tax brackets and marginal rates for 2024:

15% on taxable income up to $55,867

20.5% on income between $55,867.01 and $111,733

26% on income between $111,733.01 and $173,205

29% on income between $173,205.01 and $246,752

33% on income above $246,752.01

It’s important to note that these rates apply nationwide, while additional provincial taxes may vary.

Tax Brackets and Marginal Rates for Alberta (including Calgary) in 2024

Alberta, home to Calgary, follows a flat-rate tax structure for all income levels, simplifying tax calculations but potentially posing challenges for low-wage workers. Here are the Alberta tax brackets and marginal rates for 2024:

10% on the first $148,269 of taxable income

12% on income between $148,269.01 and $177,922

13% on income between $177,922.01 and $237,230

14% on income between $237,230.01 and $355,845

15% on income above $355,845

Tax Planning Strategies

Effective tax planning is essential for individuals and corporations to minimize tax burdens and enhance after-tax income. Consider the following tax preparation strategies:

Savings for Retirement:

RRSP contributions offer tax deductibility, reducing taxable income. TFSA investments use after-tax cash, providing tax-free gains and withdrawals.

Income Splitting:

Spousal RRSP contributions can be owned by the other spouse, allowing income sharing.

Capital Gains/Losses:

Timing capital gains can reduce taxes, and offsetting gains with losses is beneficial.

Credits and Deductions:

Utilize deductions such as mortgage interest, charitable donations, and educational credits to lower taxable income.

Strategies for Businesses:

Corporations can benefit from income splitting, tax deferral, and small company tax rates.

Deferring Taxes:

Delaying bonuses or retirement payouts to a lower-tax year can be advantageous.

Conclusion

A solid grasp of Canadian tax brackets and marginal rates is essential for individuals and businesses to navigate the tax system effectively. Staying informed about the latest amendments is crucial, and seeking professional tax services, such as D. Knight Consulting Inc, can assist in prompt and accurate tax return completion. By staying informed and seeking professional guidance, taxpayers can significantly reduce their tax burden while meeting their filing obligations.

[diamondcpacnada]

Elevate Your Financial Strategy with Chartered Professional Accountants in Calgary

When it comes to managing your finances in Calgary, having the right expertise on your side is crucial. That's where Diamond CPA, your trusted team of Chartered Professional Accountants (CPAs), comes into play. With our unparalleled dedication to excellence and in-depth knowledge of local regulations, we're here to elevate your financial strategy to new heights.

At Diamond CPA, our team of Chartered Professional Accountants understands the unique challenges that businesses and individuals face in Calgary. Whether you're a small startup or a large corporation, we provide tailored solutions to meet your specific needs and objectives.

As Chartered Professional Accountants, we adhere to the highest standards of professionalism and ethics. With our rigorous training and ongoing professional development, we stay abreast of the latest industry trends and regulations to ensure that you receive the most accurate and up-to-date advice.

Our comprehensive range of services includes:

Tax Planning and Compliance: Our Chartered Professional Accountants specialize in developing tax strategies that minimize your tax liabilities while ensuring compliance with all relevant laws and regulations. From corporate tax planning to personal tax preparation, we've got you covered.

Financial Reporting: With our expertise in financial reporting standards, we provide timely and accurate financial statements that give you a clear picture of your financial performance. Whether you need monthly, quarterly, or annual reports, our Chartered Professional Accountants deliver results you can trust.

Business Advisory Services: Beyond traditional accounting services, our Chartered Professional Accountants offer strategic advice to help you achieve your business goals. Whether you're looking to expand into new markets, optimize your operations, or secure financing, we provide the insights and guidance you need to succeed.

Audit and Assurance: Our Chartered Professional Accountants conduct audits and assurance engagements with the utmost integrity and professionalism. Whether you need an audit for regulatory compliance or to provide assurance to stakeholders, we ensure that your financial statements are accurate and reliable.

Bookkeeping Solutions: Let our Chartered Professional Accountants handle the day-to-day bookkeeping tasks, so you can focus on running your business. From reconciling accounts to managing payroll, we take care of the details so you can concentrate on what you do best.

Experience the difference that Chartered Professional Accountants can make for your business. Visit our website at diamondcpa.ca to learn more about our services and how we can help you achieve your financial goals. With Diamond CPA, you can trust that your finances are in capable hands.

[saraccounting]

Our Accounting Firm Supports Business and Personal Ventures

Are you looking for a trustworthy corporate or business accountant in Calgary who can help you maximize profits, reduce taxes, and improve your company's bottom line? Alternatively, you can be looking for an accountant in Calgary that can provide you the finest advice on how to maximize your tax savings.

At our Cpa in Calgary, it has some of the best accountants around. Our objective is to give you and/or your business the tax and financial tools required for success. Our operations are governed by the province's Chartered Professional Accountants Act. Its objectives are to protect the public, maintain the integrity of the accounting profession that it regulates, enhance and elevate the competence of registrants, and regulate the conduct of registrants.

At our Chartered Professional Accountants, we're experts at adding value so you may focus on your areas of specialization. With specialized tax preparation and accounting services, we'll help your business or practice grow. Among our clients are small businesses, lawyers, contractors, and specialists in the fields of medicine and dentistry.

Our Professional Accountants understand that if you want to protect your future, you need to focus on your area of competence

 As a result, our dedicated team is ready to provide you with accounting solutions that help you achieve your goals. You concentrate on providing patient care and finishing contracts; we'll take care of ensuring that the sum of your numbers points to a bright future.

As one of the best accounting firms in Calgary, our team is skilled at managing any type of tax situation you can run into. We provide you with our straightforward tax planning and structuring skills. We provide you with a range of resources and guidance to support you and guarantee your success on your trip. When you come to our Professional Services for your tax and accounting needs, our team of Calgary accountants will provide you outstanding accounting services, first-rate customer care, and the peace of mind that comes from dealing with seasoned professionals who have the required connections, knowledge, and abilities.

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Tips and Strategies for a Smooth Company Setup in Calgary

Establishing a company in Calgary, one of Canada's vibrant economic hubs, offers entrepreneurs a wealth of opportunities. Yet, the process of setting up a business involves careful planning, understanding legal requirements, and navigating local resources. This article aims to provide comprehensive tips and strategies for a seamless company setup in Calgary, empowering entrepreneurs with the knowledge needed to navigate the intricacies of starting a business in this dynamic city.

Understanding the Calgary Business Landscape

Research and Market Analysis: Conduct thorough market research to understand Calgary’s economic landscape, consumer behavior, and existing market trends. This information will guide business decisions and help in identifying niche opportunities.

Identify Business Structure: Choose the appropriate business structure - sole proprietorship, partnership, corporation, or cooperative - based on factors such as liability, tax implications, and operational needs.

Legal and Regulatory Requirements: Familiarize yourself with local business regulations, licensing requirements, tax obligations, and any industry-specific regulations that may apply to your business.

Tips for a Smooth Company Setup in Calgary

1. Craft a Comprehensive Business Plan

A well-crafted business plan acts as a roadmap for the company. It should cover business objectives, market analysis, target audience, financial projections, and operational strategies. This document is essential for attracting investors and guiding day-to-day operations.

2. Seek Professional Guidance

Engage with legal advisors, accountants, or business consultants who are well-versed in Calgary's business environment. They can provide crucial guidance on legal compliance, tax obligations, and business strategy.

3. Choose a Strategic Location

Select a suitable location for your business in Calgary. Consider factors such as proximity to customers, accessibility, and operational needs. Calgary offers diverse neighborhoods and business districts catering to various industries.

4. Network and Establish Connections

Building relationships is crucial in Calgary's business community. Engage with local business associations, chambers of commerce, and networking events to establish connections, gain insights, and potentially find collaborators or clients.

5. Utilize Local Resources and Support Programs

Calgary offers various resources and support programs for startups, including business mentorship, incubators, and workshops. Take advantage of these resources for guidance and mentorship during the setup phase.

6. Financial Planning and Funding

Develop a robust financial plan for the business. Explore funding options such as loans, grants, or venture capital to support initial setup costs and operational expenses.

7. Marketing and Branding Strategies

Develop a marketing plan tailored to the Calgary market. Leverage digital marketing, local advertising, and community engagement strategies to raise brand awareness and attract local customers.

8. Focus on Customer Experience

Prioritize providing an excellent customer experience. Calgary values customer service, and building a positive reputation in the local market can be a strong differentiator for your business.

9. Embrace Innovation and Technology

Calgary has a growing tech and innovation sector. Embracing technological advancements and innovation can offer a competitive advantage, streamline operations, and appeal to a tech-savvy consumer base.

10. Stay Adaptable and Responsive

Be flexible and adaptive to changes in the market. Calgary’s economy is dynamic, and businesses that can pivot and respond effectively to market shifts tend to thrive.

Strategies for Sector-Specific Setup

Energy Sector: For businesses in Calgary's renowned energy sector, understanding energy policies, environmental regulations, and industry trends is crucial.

Tech and Innovation: Calgary is becoming a hub for technology and innovation. Businesses in this sector should focus on leveraging the local tech community, investing in R&D, and tapping into government support for innovation initiatives.

Retail and Services: For retail and service businesses, understanding local consumer behavior, competition, and ensuring a unique value proposition can lead to success.

Conclusion

Establishing a company in Calgary involves strategic planning, adherence to legal requirements, and a comprehensive understanding of the local business landscape. By following these tips and strategies, entrepreneurs can set up their businesses with greater ease, positioning themselves for success in Calgary’s dynamic and diverse market. A well-informed and strategic approach to company setup paves the way for a promising business journey in this thriving Canadian city.For more insights detail contact us ONDEMAND INTERNATIONAL

[wavetaxes]

"Wave Taxes Inc" is a leading accounting firm in Calgary, Canada, offering expert financial solutions. Their skilled team provides personalized tax planning, accounting, and financial advisory services for individuals and businesses. Trusted for their accuracy and dedication, they aim to optimize financial management and ensure compliance with Canadian tax regulations. Whether it's personal taxes or corporate accounting, clients rely on "Wave Taxes Inc" for reliable, efficient, and customized assistance. visit us: https://wavetaxes.ca

[taxconsulting12]

personal tax accountant

Calgary Tax Consulting is a reputable tax consulting firm based in Calgary, Alberta, Canada. The company specializes in providing exceptional tax consulting services to individuals, small businesses, and corporations. They pride themselves on offering tailored solutions that help their clients achieve their financial goals while staying compliant with tax laws and regulations.

With a team of highly qualified and experienced tax professionals, Calgary Tax Consulting offers a wide range of services, including tax planning, preparation, and filing, bookkeeping, payroll management, and audit support. They are committed to staying up-to-date with the latest tax laws and regulations, ensuring that their clients receive accurate and reliable advice.

[matrixaccountingcalgary]

Professional Tax Accountants Calgary Professional tax accountants play a crucial role in assisting individuals and businesses with tax compliance, planning, and optimizing their financial positions. Their expertise in tax laws and regulations ensures accurate and efficient tax management, providing clients with peace of mind and potential tax savings.

Professional tax accountants are trained and qualified professionals who specialize in providing tax-related services to individuals, businesses, organizations, and other entities. These accountants have expertise in tax laws, regulations, and tax planning, enabling them to assist clients in various tax-related matters.

Matrix Accounting is one of the best accounting firm in Calgary, with the team of highly professional accountants to deal with all tax matters at personal and corporate levels.

Book a free consultation with experts today at 403-668-4070.

[nspccalgary]

Corporate Tax Preparation Services

Looking for the best corporate tax accountant in Calgary? Look no further than NSPC. Our experienced team of professionals specializes in providing comprehensive tax services to businesses of all sizes and industries in Calgary and beyond.

Our corporate tax accountant services include tax planning and advisory, tax compliance and reporting, and tax return preparation. Our team stays up-to-date with the latest tax laws and regulations to provide you with accurate and timely advice and assistance.

At NSPC, we understand the importance of developing strong relationships with our clients. Our team takes a proactive approach to tax planning and works closely with you to understand your business goals and develop a customized tax strategy that meets your specific needs and helps you achieve your objectives.

With NSPC, you can rest assured that your corporate tax affairs are in good hands. Contact us today to learn more about our corporate tax accountant services in Calgary.

[mmtcpa]

Best Accounting Firms Calgary | MMT Accounting Services Calgary Accounting Specialists

Are you looking for accountants in calgary? Look nowhere as MMTCPA has got you all covered. Due to the huge work experience and loads of our clients' support, we are confident to say that one of Calgary's top accounting businesses is MMT Accounting Services, chartered professional accountant calgary. Our team of unique professionals and competent accountants, best accountant calgary, specialises in offering complete accounting and financial services to both individuals and corporations. We as one of the best accounting firms calgary provide a wide range of services, such as compliance, financial reporting, and tax planning. Our priority is to provide accounting services calgary by providing each of our clients with individualised service and solutions that are specifically designed to fit their individual needs. We, accounting specialists, are very confident in our meticulousness and dedication to providing superior customer service. You can rely on us as calgary accountants to handle all of your financial matters with honesty and diligence. To find out how MMTCPA, cpa calgary, may assist you in achieving your financial objectives, contact us right away.

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[diamondcpacnada]

Diamond CPA: Your best Partner for Accounting and Tax Services in Calgary

Looking for reliable accounting and tax services in Calgary? Look no further than Diamond CPA!

Our team of dedicated professionals specializes in providing top-notch accounting and tax solutions tailored to meet your unique business needs. Whether you're a small startup, a growing business, or an established corporation, we've got you covered.

With Diamond CPA, you can expect:

Expert Tax Planning: We'll help you minimize tax liability while complying with the latest tax regulations.

Precise Financial Reporting: Our accurate financial statements will empower you with critical insights for better decision-making.

Business Advisory Services: From budgeting to strategic planning, we'll guide you every step of the way.

Personalized Support: Every client differs, so we provide personalized attention to ensure financial success.

Let us handle the numbers while you focus on growing your business. Contact Diamond CPA today for accounting and tax services in Calgary that you can trust.

[saraccounting]

Reach Out to Us by Phone, Online, Or In Person at Our Office Located in Calgary

We are involved with CRA-related taxation for a lot of years. We have represented clients in voluntary disclosures, collections, assessments, bankruptcy, appeals, and taxpayer relief cases in the past.

We are regularly asked if we handle tax cases.  Luckily, we periodically work with some of the best tax lawyers in Calgary.  For most files, including payment agreements, unfiled tax returns, audits, and objections, there are no judicial actions.  Our Tax consultant Calgary area of expertise is handling these files outside of court.  Actually, we receive a lot of referrals from tax attorneys who would rather not take on this type of work.  Often, the cost of hiring a tax attorney to resolve a tax dispute is greater than the amount of the contested tax bill.  We try to solve the issue in a way that is far more effective and economical.  Generally speaking, we recommend suing the Canada Revenue Agency and engaging with a tax lawyer only after exhausting all of our regular avenues of engagement with them. 

A chartered accountant

With years of combined experience in general company and individual tax services, as well as expatriate and non-resident tax services, we are a team of Tax consultant calgary. Our staff has a comprehensive understanding of the Income Tax Act and can help you with any tax-related matters. By creating the best tax plan to lower your tax liability, they free up your time so you can focus on achieving your personal and professional goals.

To get in contact with us, give us a call right now or use the form below. A trained member of our staff will calculate the best possible price and get back to you right away.

Our highly skilled tax consultants manage your personal or corporate expenses in a way that automatically reduces your tax returns. By providing advanced accounting services in Calgary, where our staff of skilled accountants completely handles the records of your business's sales, purchases, and other operations, we hope to keep you stress-free.

We also have tax-savvy accountants who have completed the Institute of Chartered Accountants' In-Depth Tax Course. These experts provide help with income tax planning, indirect tax, corporate restructuring, family trusts, and estate preparation, among many other specialized services. Our employees put a great deal of effort into expanding their industry-specific knowledge. We truly believe that understanding our clients' needs and how they operate is essential to provide them with the best service possible that is suitable for their business.

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Sameer Somani Professional Corporation: A Name You Can Trust

It is surprising that even in today’s world there are companies that are still not outsourcing accounting services Calgary. Accounting is one of the few things that cannot be ignored. But this does not mean that you should do it yourself. Well, doing the accounting by yourselves without any experience is a big no. And why shouldn’t it be? After all, it is very important and even a small error can make or break things. That’s why most of the companies hire accountants who are highly talented. If you also think that hiring a good accounting company is a nice idea, you should start looking for a great company now. You can begin the work by doing quick research on Google. After that, you can filter the options by checking the experience of the company, the services that it provides, and the amount that it charges. When you are on it, you can also read the testimonials to get an honest opinion. When you read the reviews from other people, it will help you understand whether you can actually trust the company or not. Sounds like too much work? Well, don’t worry because while we were on it, we have found Sameer Somani Professional Corporation for you. It is a leading company that works with highly trained and skilled accountants in Calgary. This is a full-service accounting company and has gained a good reputation in the market. Do you know why? It’s because Sameer Somani Professional Corporation offers great accounting and GST filing services. But this is not it because the accountants at this company also believe in building strong relationships with the clients. Sameer Somani Professional Corporation always values its clients and makes sure that they get the best service that they have paid for. The highly talented team at this company believes in generating positive results for the clients. You don’t have to worry about the size of your business to work with Sameer Somani Professional Corporation because this company helps both small and big businesses. Other than GST filing and accounting services, this firm also offers many other kinds of services. Like personal accounting, tax preparation, tax return, small business accountant, tax planning, and more. So, what are you waiting for? Pay a visit to the website of Sameer Somani Professional Corporation now and know more about the Calgary accountants. For more information, visit https://www.sameersomani.com/ Original Reference: https://bit.ly/3kklfuz

[versatileca-blog]

Best Legal Structure for Small Business

When you start a small business in Calgary, one of the items on the long list of things to attend to is choosing a legal structure. What is the best legal structure for your small business? This choice depends on several factors. Will you be going into business on your own or with someone else? How much liability are you willing to accept? What choice or choices will result in the best tax implications? Do you want to have Alberta (or any other province) as your jurisdiction or is it better to have a federal jurisdiction? You can find out the answers to these questions by sitting down with us at Versatile Accounting.

We have been providing chartered accountants Calgary, tax, and assurance services to clients in Calgary and throughout Alberta for years. What follows is a brief rundown of the various business structures, their advantages, and disadvantages. Always remember that while you can change the legal structure of your business along the way, it may be more efficient and cost-effective to make the right choice when you first start your business. This is another matter in which we have the experience to help you make the right choice.

Sole Proprietorship in Calgary

This is going into business on your own. A sole proprietorship is the least expensive legal business structure and the most simple. You own the business, manage the business, hire employees, and pay them. The law will consider you and your business to be the same entity.

This business model and legal structure appeals too many who want to run their own business, not work for someone else, and have control over all operations. With a sole proprietorship in Calgary, the owner takes all of the profits and accepts the risk of any and all losses. The sole proprietor pays all of the taxes on their personal tax return. When you sit down with personal tax accountant Calgary, we can explain how any of your business creditors will not only have a claim against your business assets but your personal assets as well. Likewise, anyone who is hurt either while on the job in your workplace or there as a customer or visitor will be able to sue you personally for damages. This sort of “unlimited liability” is commonly seen as the most important “downside” to a sole proprietorship for a company that works with a large market, has lots of employees, and provides lots of services to the general public.

There are tax implications of a sole proprietorship of which we will advise you. Because, under Canadian and Alberta law, you are one and the same with your business for tax purposes. Your net business income will be included in your personal tax return. A useful aspect of this fact is that if your new small business suffers a loss, you can deduct the loss from your other personal income. Of course, a successful small business will make a profit and that is added to your personal income for tax purposes. To the extent that this “extra income” bumps you up into a higher tax bracket that can be a pain.

A sole proprietor will need to obtain licenses as required for their type of business such as the Goods and Services Tax-Harmonized Sales Tax Account (GST/HST), municipal permits, and the like. At Versatile Accounting we can help you with the bookkeeping services Calgary and tax services Calgary related to these requirements.

Sole Proprietorship Pros and Cons in Calgary

Sole Proprietorship Advantages:

You own everything and take all of the profits

Sole Proprietorship Disadvantages:

There is no limit to your personal liability

Why Choose a Sole Proprietorship for Your Small Business in Calgary?

If you do not expect any liability issues, want to deduct early financial losses from your personal income for tax purposes, and want to keep initial costs down, pick a sole proprietorship. As always, talk to us at Versatile Accounting in Calgary if you have any questions.

Partnerships in Calgary

Business partnerships consist of one or more owners who put their resources and efforts together to make a new business work. Management can be “by committee” or one partner can be the manager. This does not affect the partnership legal structure. For the purposes of taxation, all partners are usually considered business owners and each one is liable for business debts and expenses. This may be different for some partners in a limited partnership which is one of many reasons to discuss this legal structure option with us at Versatile Accounting.

Partnerships need licenses, permits, and the like. These requirements will vary according to the business.

As with a sole proprietorship, you can run a partnership using the exact names of the partners. Then there is no need to register your business name. If you use any other name, you will need to register the business name in Alberta and will be wise to make sure that the name is unique to avoid taking an already-registered name and to avoid legal difficulties.

A major issue with partnerships is defining responsibilities and rights of each partner from the very beginning. Too many partnerships break up because this was not done properly at the beginning. Ask us at Versatile Accounting in Calgary and we will be pleased to refer you to a competent attorney to draw up the papers you need.

General and Limited Partnerships

There are two kinds of partnerships in Alberta to consider. These are general partnerships and limited partnerships. Both are partnerships in which two or more individuals contribute their time and resources and share in profits and losses. Here are the differences.

A general partnership is what is created when two people start a business together and not specifically create a limited partnership. All partners have equal liability, say in the business, and right to profits.

A limited partnership has both general and limited partners. The general partners manage the business, get a larger share of the profits, and are liable for business losses and debts just like partners in a general partnership. The limited partners are essentially investors whose sole contribution is investment capital. They do not have a say in how the business is run. They will make less of a profit but will not be liable for business debts and losses. Their sole risk is the loss of their investment capital. And, limited partnership shares can be transferred without having to sell the business. In order to form a limited partnership a “Partnership Declaration” must be filed.

Advantages and Disadvantage of Partnerships in Calgary

Partnership Advantages:

Partners are in charge of and own all business assets

The work of management is done by more than one person

Regulation of a partnership is limited

Although the business needs separate accounting and tax prep, each partner only has to file their own personal tax return

This is a less expensive business setup than for a corporation

Several partners share in the initial investment

Profits are shared by partners and losses can be deducted from personal income

Partnership Disadvantages in Calgary:

Liability of general partners is unlimited and can result in personal bankruptcy

Actions of one partner can be binding on and result in major problems for other partners, even when not consulted

Management-by-Committee can be tedious and inefficient

Finding partners you can work with can be difficult

The business ownership cannot be transferred unless the business is sold although minor partners in a limited partnership may sell their shares

This is a slightly more expensive business set up than a sole proprietorship if a partnership agreement is required.

Raising investment capital can be difficult

This is a good business structure for people who can work together, can benefit from shared skills, and when liability issues are unlikely.

Talk to us at Versatile Accounting in Calgary regarding how to “write off” early business tax losses in your partnership against your personal income.

Corporations for Calgary Businesses

When you are just starting a small business, you will want to keep costs down and this often means starting with a sole proprietorship or general partnership. However, there can be distinct advantages to incorporating your small business as we note in our blog article of that title. With a corporation you will have limited personal liability, the business does not have to be sold when an owner leaves or dies, and getting investment capital can be easier.

From the taxation viewpoint, there are ways to share or split income within your family from corporate income and there are tax advantages such as the Small Business Tax Deduction (SBD) for Canadian controlled corporations. This can run as high as $500,000!

While we generally think of Calgary corporations like Suncor Energy Inc., Imperial Oil Ltd., or Enbridge Inc., a corporation can have only one person who owns all of the corporate shares and runs the business. And, a large business size is not necessary to incorporate. Versatile Accounting provides professional corporate tax services in Calgary to corporations large and small. We also provide bookkeeping services for corporations and well as other small business structures.

In general, there are three reasons to consider a corporate business structure:

Limited liability

Corporate tax advantages

Ability to raise capital by selling shares

Disadvantages of a corporate structure include these:

Double taxation of corporate profits by the corporation and dividends by shareholders

Dilution of ownership if you sell too many shares

More expensive than setting up a sole proprietorship or general partnership

A big part of why you may choose a corporation over another business structure may come from careful tax planning. It is a fact of life that too many times the results of good ideas and hard work can be diminished by sloppy tax planning. Contact us at Versatile Accounting for help in determining how your business structure will affect your taxes for your particular business.