Friday, 10 August 2018
Why manual osteopaths should incorporate?
Incorporation vs Sole Proprietorship
My students know that I recommend they incorporate their private osteopathic clinics. Sole proprietorship is not a good idea for manual osteopaths. While corporations cost more to register, run and manage, they are the best asset protection money can buy. Here are some of the benefits of incorporating your osteopathy related business:
1- You pay less tax if your annual income is over $55,000 per year in Canada.
2- If your corporation makes less than $500,000 in gross income per year, and is registered as a Canadian controlled private corporation, meaning it is not owned more than 50% by a non-Canadian or a public corporation, you will receive a special tax deduction that effectively lowers your corporation tax by half.
3- You can have multiple business names for the same company.
4- You have personal protection as you and your company are separate legal entities under the law. The obligations of the business belong to the company, not you personally.
5- You can become 100% shareholder and take all the profits of the company without becoming the director of the company if you do not wish to run the company yourself. This allows you to maximize your role in your small business without personal liability.
6- There are potential personal tax benefits as you can withdraw profits in different ways.
7- You can become an employee of your own corporation to receive a salary and bonus. This is another way to save on your personal income tax.
8- You can add family members as non-voting share holders which allow them the right to earn dividends.
9- There are potential corporate tax benefits.
10- You can transfer or sell the business to others easily.
11- Asset protection against liability is a big advantage of incorporating your business.
12- You can deduct more types of business expenses as a corporation.
13- You can pay zero corporation tax if you remove all the profits of your corporation as your salary.
We graduate successful manual osteopaths because we teach them everything we know about business!