Does an 'aged' federal Canadian corporation have any inherit value?
Hi there, a decade+ ago I created a federal Canadian corporation for my freelance IT / software development business.
It was a nieve choice given that to this day I remain the only 'employee' / shareholder and given the added burden of filing corporate tax - not to mention the complexities of accounting since the money you earn from it you will have to draw out in some way such as dividends or payroll and then reflect that on not only the corporate return but also your personal - I 100% would recommend against it to any up and coming entrepreneurs.
Instead you should simply use sole proprietor status for as long as seemingly possible; and if at some point your business kicks off extra cash that you can use to help fund some sit-down time with professionals who may have better understanding of corporate law to help you make the decision about how to structre things - then that is the time to begin considering if to incorporate. In other words, don't 'incorporate' until you are actually making enough money to even justify thinking about it. If you already have debt, or are struggling to pay rent month to month you are absolutely not justified in thinking about it. Even if you are making good money, you may not need/want the burden ever! /end rant
So with that said - and after having a poor year of sales, not to mention some outstanding taxes due (on said corporation) - I am looking to gracefully conclude this corporate entity off somehow and as part of that process I am just doing some preliminary research (hence this thread). My first question is there any inherit value in an 'aged' corporation like this?
And to be clear, I am not trying to skirt responsiblity for the outstanding taxes due on it and intend to pay what big brother needs to be paid - I am simply evaluating all available options. I have absolutely no idea if aged corporations have value on their own so I thought it was prudent to ask. Like many, I have read that it is a somewhat common practice for investors or entrepreneurs or even other corporations to sometimes buy corporate entities as part of their own tax sheltering strategies; or in some cases perhaps it is cheaper / easier / more desireable than starting a new corporation. Those aspects are none of my business but if someone else feels they can get value out of it - then great, maybe there is opportunity for a win / win here.
Anyway, your insights or advice would be appreciated! Ie- on the value of an 'aged' corporation if any, or if you might suggest another route to help in the 'graceful conclusion' of this corporation.
It was a nieve choice given that to this day I remain the only 'employee' / shareholder and given the added burden of filing corporate tax - not to mention the complexities of accounting since the money you earn from it you will have to draw out in some way such as dividends or payroll and then reflect that on not only the corporate return but also your personal - I 100% would recommend against it to any up and coming entrepreneurs.
Instead you should simply use sole proprietor status for as long as seemingly possible; and if at some point your business kicks off extra cash that you can use to help fund some sit-down time with professionals who may have better understanding of corporate law to help you make the decision about how to structre things - then that is the time to begin considering if to incorporate. In other words, don't 'incorporate' until you are actually making enough money to even justify thinking about it. If you already have debt, or are struggling to pay rent month to month you are absolutely not justified in thinking about it. Even if you are making good money, you may not need/want the burden ever! /end rant
So with that said - and after having a poor year of sales, not to mention some outstanding taxes due (on said corporation) - I am looking to gracefully conclude this corporate entity off somehow and as part of that process I am just doing some preliminary research (hence this thread). My first question is there any inherit value in an 'aged' corporation like this?
And to be clear, I am not trying to skirt responsiblity for the outstanding taxes due on it and intend to pay what big brother needs to be paid - I am simply evaluating all available options. I have absolutely no idea if aged corporations have value on their own so I thought it was prudent to ask. Like many, I have read that it is a somewhat common practice for investors or entrepreneurs or even other corporations to sometimes buy corporate entities as part of their own tax sheltering strategies; or in some cases perhaps it is cheaper / easier / more desireable than starting a new corporation. Those aspects are none of my business but if someone else feels they can get value out of it - then great, maybe there is opportunity for a win / win here.
Anyway, your insights or advice would be appreciated! Ie- on the value of an 'aged' corporation if any, or if you might suggest another route to help in the 'graceful conclusion' of this corporation.
