Business owners

Once you're incorporated, your personal finances and your company stop being separate problems. We plan them together.

Illustration of a business owner with a storefront and company structure

What changes financially once I incorporate?

Three things change at once. Your business income is now taxed at the small business rate first, around 11 percent in BC, instead of your personal rate. You choose how money reaches you, as salary, dividends or a mix. And your corporation becomes its own taxpayer with its own accounts, which means every personal and company decision now affects the other.

The opportunity is real: income you do not need personally can stay in the corporation and grow at that low rate. The risk is real too: without a plan, owners overpay themselves, miss the right salary and dividend mix, and leave cash sitting idle. That is the whole subject of our corporate and business planning service.

Should I pay myself a salary or dividends?

Salary creates RRSP contribution room and counts toward CPP, the Canada Pension Plan, but both you and the corporation pay into it and payroll costs more to run. Dividends skip CPP, cost less to administer, and are taxed at a lower personal rate, but they build no RRSP room and leave you outside the public pension entirely.

Most owners benefit from a deliberate mix, and the right split changes year to year. Enough salary to build RRSP room and CPP, the rest as dividends, is the common starting point. We model both sides of the tax bill with your accountant before you pay yourself a dollar. See how tax planning works.

What should I do with the cash building up in my corporation?

Cash left in the corporation after you pay yourself is called retained earnings, and it belongs to the company, not you. Taking it all out personally triggers a large tax bill. Leaving it in a chequing account earns almost nothing. The middle path is investing it inside the corporation and withdrawing it later, in a planned way.

A corporate investment account lets that cash compound at the small business rate until you need it. The order of withdrawals matters just as much as the investments: salary, dividends and shareholder loan repayments each carry different tax. We build that withdrawal plan so more of the cash ends up in your pocket instead of the TAXMAN's. This sits inside our investment planning and tax planning work together.

What's the passive income threshold and does it affect me?

When a corporation's passive investment income, meaning interest, rent, royalties and taxable capital gains from investments, passes $50,000 in a year, the government starts clawing back the small business deduction. For every $1 over the threshold, $5 of active business income loses the low small business rate. At $150,000 of passive income, the low rate is gone entirely.

If your corporation earns under $50,000 a year from its investments, this does not touch you. Above that, the fix is usually structural, not panic: corporate-owned life insurance and certain account types grow without counting toward the threshold, and the timing of withdrawals changes the number. We plan around the line before you cross it. How we handle tax planning.

Can my corporation fund my retirement?

Yes, and for many owners it does this better than an RRSP alone. Three tools do most of the work. An Individual Pension Plan, or IPP, is a company-funded pension that allows larger contributions than an RRSP once you are over 40. A corporate investment account compounds retained earnings. Corporate-owned insurance grows tax-sheltered and pays out largely tax free.

The right mix depends on your age, your pay mix and when you want to stop working. An IPP only makes sense with salary history, which is another reason the salary and dividend choice matters early. We compare all three against your numbers in a retirement plan built for owners. See retirement planning and how corporate life insurance fits.

What happens to the business if something happens to me?

Without a funded plan, two bad things tend to happen at once: the business loses the person who generates the revenue, and your family or partners inherit a company they cannot easily run or sell. Key person insurance pays the business to cover lost revenue and hiring. A buy-sell agreement funded with insurance sets who buys your share, at what price, and where the money comes from.

An agreement with no funding behind it is a promise your partners may not be able to keep. We write the plan with your lawyer, fund it with the right cover, and review it as the company's value changes. This connects life insurance, estate planning and corporate planning into one file.

How do I sell without losing a large share to tax?

The Lifetime Capital Gains Exemption lets you shelter over $1 million of capital gains from tax when you sell shares of a qualifying Canadian small business. The catch is the word qualifying: your company's assets and structure must meet the tests, often for 24 months before the sale. Owners who tidy the structure early keep far more than owners who tidy it during the deal.

Getting ready usually means moving excess investments out of the company, cleaning up the share structure, and sometimes multiplying the exemption across family members. None of this works at the last minute, and a buyer's offer never waits for your paperwork. If a sale is even a five-year thought, the structuring conversation belongs now, with your accountant and lawyer at the table. Start with tax planning and estate planning.

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What does a planned corporation keep that an unplanned one loses?

A detailed business-owner case study will be added here when the approved figures and story are ready.

See all case studies

What else should you know before starting?

I have an accountant. Why do I also need a financial advisor?

Your accountant reports what happened last year and files it correctly. We plan what happens next: how you pay yourself, where corporate cash goes, how you are insured and how the business ends well. The two roles work best side by side, and we meet with your accountant so nothing conflicts.

Do I need to be incorporated to work with you?

No. We work with sole proprietors and partnerships too, and deciding whether to incorporate is one of the most common questions we answer. Once the numbers show incorporation would help, we plan the transition with your accountant.

How are you paid?

It depends on the work. Planning can be fee based, and insurance or investment arrangements pay commissions. We explain every cost before you decide on anything, and we put it in writing. There is no charge for the first assessment.

Do you work with businesses outside Vancouver?

Yes. We are licensed in British Columbia and Ontario, and most meetings happen by video call. Owners in Burnaby, Surrey, Toronto and smaller centres get the same process as owners two blocks from our office.

What happens in the complimentary assessment?

We spend 20 minutes learning what your business earns, what it holds and how you currently pay yourself. You leave knowing which of the seven questions on this page are costing you money, and what fixing them would involve.

Is my corporate information kept private?

Yes. Everything you share is confidential, and we do not contact your staff, partners or customers. If you introduce us to your accountant or lawyer, we only discuss what you have agreed to share.

What's your corporation quietly costing you?

Bring your pay mix, retained cash or succession question to a complimentary 20-minute assessment.

Book a complimentary 20-minute assessment Call us directly: 604-618-7365