Entrepreneurship & Small Business

Full time permanent employee AND incorporating a company question

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  • Jun 5th, 2017 11:49 pm
Newbie
May 10, 2017
16 posts

Full time permanent employee AND incorporating a company question

Hi all,
I am currently working at a big corporation in Montreal. I am a full-time permanent employee and I pay all the EI, Pensions, RRSPS, etc etc.

I want to get into affiliate online marketing and online selling business (open a shopify store and do affiliate marketing and receive commission on the side). So I was thinking of doing a corporation so like that I can save on taxes since I am already considered as high income.

My question is if I open this company, and I start doing some money. Let's say I lost my permanent full-time job because the company laid me off or what not. I would usually be entitled to receive Employment insurance benefits for 11 months because I lost my job. If I have a company on the side and earn money from that, will that impact me from getting any EI benefits? Will I still be able to apply to get EI benefits?

Has anybody been in this position before? How does that work? Can anybody please give me any advice? I wanted to call my accountant but felt like asking here before to have a heads up.

Thank you :)
10 replies
Deal Guru
User avatar
Mar 23, 2008
13006 posts
10009 upvotes
Edmonton
There's a big EI thread in the Careers section where you might get better help.

My first thought is that you're supposed to claim any income that you have when receiving EI. That means that your side income will reduce your EI amounts, and depending on how much side income you make, you may or may not receive EI payments.

On the other hand... Since it's through a corporation, you may be able to "juggle" things so you don't receive an "income" while on EI. But if they find out about it, there may be repercussions.

C
Newbie
May 10, 2017
16 posts
Hey CNeufeld,

Thank you for your answer! I will post my question under the EI thread like you suggested to get more answers.

I will have a business account that I will have all the income I get in there. Then I will do some deposits to my personal account when I want to take some money out (so I think this is when it can be considered as Income right? when I transfer money from my business account to my personal account as payroll).

Let's say I am on EI and make some money, but I do not transfer any money to my personal account even though I gained some income (Because let's say I want to reinvest it or use it to pay for advertisement or whatnot). In this case, I can tell them that I did not earn any income (which is true).

But what I want to know is...I can still APPLY to get EI benefits even if I have a corporation. How much income I made during that period is deductible from what I should get as a benefit, but I can still apply to get EI even if I have a corporation. Like they wont tell me you cant get any EI because you have a corporation, right? I know you are not an accountant so if you don't have an answer it's all good :)
Deal Fanatic
Jul 4, 2004
7430 posts
4677 upvotes
Ottawa
Unfortunately, I think it's going to be hard to get a definitive answer on the forum. I believe that having a corporation in itself won't prevent you from getting EI however the important point is how much time you spend working for the corporation. To be safe, you probably should just keep paying yourself a reasonable amount from the corporation and declaring that income to EI. The other issue is that you said you are in Quebec where a lot of things are done differently than the rest of Canada and I suspect they have their own rules for EI as well. I would contact the employment insurance people in Quebec and ask them.
Deal Fanatic
User avatar
Nov 18, 2002
7041 posts
652 upvotes
BC Interior
I was going to say pretty easy setup until I read Quebec :)

Have you considered incorporating in Ontario or another province?
Newbie
May 10, 2017
16 posts
ichpen wrote: I was going to say pretty easy setup until I read Quebec :)

Have you considered incorporating in Ontario or another province?
Is this something that can be done if I live in Quebec?

I can open a Corporation in Ontario or Ottawa let's say even though I live and work in Quebec? It will be a purely online business.

Is it this much more difficult in quebec?
Newbie
May 10, 2017
16 posts
michelb wrote: Unfortunately, I think it's going to be hard to get a definitive answer on the forum. I believe that having a corporation in itself won't prevent you from getting EI however the important point is how much time you spend working for the corporation. To be safe, you probably should just keep paying yourself a reasonable amount from the corporation and declaring that income to EI. The other issue is that you said you are in Quebec where a lot of things are done differently than the rest of Canada and I suspect they have their own rules for EI as well. I would contact the employment insurance people in Quebec and ask them.
That's a very good point! I will make sure I claim something to show them that I have some revenue. Like I asked...michelb, is it THAT much different? Do you know if I can incorporate in Ontario even if I live and work in Quebec? Thanks :)
Deal Fanatic
User avatar
Nov 18, 2002
7041 posts
652 upvotes
BC Interior
rammut wrote: Is this something that can be done if I live in Quebec?

I can open a Corporation in Ontario or Ottawa let's say even though I live and work in Quebec? It will be a purely online business.

Is it this much more difficult in quebec?
You certainly can incorporate in Ontario. The corporation needs to have an Ontario address but most services likely BDC will give you an Ontario address for a fee or you can get a mailbox somewhere in ON.

Now I cannot answer your Quebec questions but QC is pretty quirky in every respect so definitely consult someone with experience there.
Newbie
May 10, 2017
16 posts
ichpen wrote: You certainly can incorporate in Ontario. The corporation needs to have an Ontario address but most services likely BDC will give you an Ontario address for a fee or you can get a mailbox somewhere in ON.

Now I cannot answer your Quebec questions but QC is pretty quirky in every respect so definitely consult someone with experience there.
Wow thank you, I will call my accountant in the next days after I do some research and I will definately ask him about incorporating it in ontario. Plus I am sure corporations pay a bit less in taxes in ontario than quebec. I am ready to bet on that one even though I don't have the answer lol
Deal Addict
Feb 29, 2012
2654 posts
1461 upvotes
Richmond
It's pretty common for a startup corporation to re-invest all the money it earns in the business and not pay a salary in the first year. But if claiming EI you must be able to state that you are actively looking for other work and ready to take it. Also if you were laid off from your old job and received any severance pay, EI would not kick in until that was exhausted.

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