Incorporating... myself?

[alltherage]

I'm looking in to a New Homes Sales position with a company that basically requires you to incorporate yourself, because you essentially "employ yourself" like a contractor. I want to know what this entails, or if you guys know where to get some info... because googling it was kind of useless when I tried. Maybe your search skills are better. Or maybe you already know?

Thanks in advance!!

[MolsonInBothHands]

I actually just went through this myself as I am going to get out of the office and work as a contractor in the oil patch. The easiest way is to go here, and fill out the online forms, and they will perform the appropriate searches, setup the share structure, and put together a minute book for you. My bill was $415.00. The are located at 2323 - 32 Ave N.E., and you just pick up the minute book in a day or so. You can then proceed to the bank, and get a corporate account. You can also register online with revenue canada to get corporate income tax accounts, and a gst account.

[alltherage]

Youch! $415!? Snap man, that's rough. I wonder if it's something they will pay for instead of myself...

[troutman]

Speak to a corporate lawyer and an accountant. There may be tax benefits for you in setting up a corporation.

[alltherage]

Thanks dudes. My father is a CMA actually, I'll talk to him about it a little bit... I don't know a lawyer though.

[MolsonInBothHands]

Originally Posted by alltherage

Youch! $415!? Snap man, that's rough. I wonder if it's something they will pay for instead of myself...

I doubt it, but being incorporated means you will take away a lot of their responsibility in regards to payroll deductions, compensation premiums, benefits, etc. This means you should also be able to bill a higher commission than someone who is their employee. Gone also, are the days of getting your income tax returns done for under $100.

[Boblobla]

I am incorporated and I used The Incorporators to set up my stuff.

They were really helpful and sent me the binder with everything I needed within a week. Was about 400 bucks though.

Advice:

If you are working somewhere as a contractor you should be getting at least 20% more money that you should if you were staff due to the fact you do not get benefits or vacation time.

Don't be late on source deduction payments, the government rapes you hard.

Don't forget to add GST to your invoices because you will have to pay the government.

Get a good accountant, it is worth the money. I love know what I can write off and what I can't without having to worry.

PM with any questions if you want, I have been a contractor for a year so a lot of it is still pretty fresh in my mind.

[First Lady]

One of the biggest mistakes newly incorporated individuals make is neglecting their bookkeeping.....

... by the time it dawns on them they cannot get it under control, they are 2 or more years behind in filing GST, annual tax returns, corporate returns, etc, etc.... then they go in search of a bookkeeper or worse yet, let their accountant do it at a much higher rate.

[Slava]

Once you are incorporated you ought to set up a personal health spending plan. It lets your corporation (i.e. you) run a benefits plan for your employees (i.e. you!).

Basically you move money from the corporation to yourself without having to pay tax on the money, and the payment is a tax deduction to your corporation. Because you have no benefits as a self-emplloyed contractor you should consider this if you use your health plan or health services on a regular basis (chiro, massage, prescriptions, etc.)

I don't want to hijack the thread here, so feel free to PM me if you want more details or have any questions or anything.

[alltherage]

Holy snap. This is actually quite intimidating. I'm going to have to see whether they have some support for all this...

What a brain full.

[Boblobla]

Originally Posted by alltherage

Holy snap. This is actually quite intimidating. I'm going to have to see whether they have some support for all this...

What a brain full.

It is quite an overload for the first little while but it is a great learning experience tbqh.

I am very happy I am doing it all myself.

[Nufy]

I'm doing it right now as well.

I have an accountant lined up to do everything the above noted website does at a slightly higher cost.

Lucky for me is that my first contract will be with my current employer for at least a year.....

I'm not an expert but I may have answers to some of your questions as I have probably asked them of my colleagues.

PM or post away and I'll do what I can to help.

[Nufy]

Originally Posted by Slava

Once you are incorporated you ought to set up a personal health spending plan. It lets your corporation (i.e. you) run a benefits plan for your employees (i.e. you!).

Basically you move money from the corporation to yourself without having to pay tax on the money, and the payment is a tax deduction to your corporation. Because you have no benefits as a self-emplloyed contractor you should consider this if you use your health plan or health services on a regular basis (chiro, massage, prescriptions, etc.)

I don't want to hijack the thread here, so feel free to PM me if you want more details or have any questions or anything.

I'm looking into this as well. Don't forget the administration fee.

Any PHSP's you recommend there Slava ???

I'm looking at Olympia Trust and or Costplus......

[First Lady]

Originally Posted by alltherage

Holy snap. This is actually quite intimidating. I'm going to have to see whether they have some support for all this...

What a brain full.

Just take it one step at a time. Tapping into the wealth of knowledge here will get you going in right direction.

[Nufy]

Originally Posted by First Lady

One of the biggest mistakes newly incorporated individuals make is neglecting their bookkeeping.....

... by the time it dawns on them they cannot get it under control, they are 2 or more years behind in filing GST, annual tax returns, corporate returns, etc, etc.... then they go in search of a bookkeeper or worse yet, let their accountant do it at a much higher rate.

Everyone I have quizzed have told me as well to keep on top of this.

Set a schedule and keep to it.

[Slava]

Originally Posted by Nufy

I'm looking into this as well. Don't forget the administration fee.

Any PHSP's you recommend there Slava ???

I'm looking at Olympia Trust and or Costplus......

I usually use Olympia Trust. It costs you about $400 to get it set-up though...I have another route that is the same but for $250.

Olympia Trust is huge, so if you ever get audited you have them behind you and nothing to worry about. That being said, the law is the law...so if you want to save $150 upfront then the other option is there.

The admin. fee everywhere is 10%. That is also a write-off though, and really I'd pay the 10% everytime for the tax savings.

[Nufy]

Cost Plus is 8%.....

[Slava]

^ For the admin fee?

[Nufy]

Yep
150 One time enrollment fee
8%

www.costplus.ca

[Slava]

Hey, that is seriously cheap! As long as they stay within the CRA constraints and pay quickly it sounds like a good deal! Whats the decision between them and Olympia then?

(I'm not familiar with them, obviously).