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Investing as a Business Owner

by Rockmoor Wealth | Blog, Business Owners, Corporate, investment, RRSP, Tax Free Savings Account

Many business owners have built up earnings in their corporation and are looking for tax efficient ways to pull the earnings out to achieve their personal and business financial goals such as:

  • building and protecting your savings

  • providing for loved ones

  • planning for retirement

Factors to consider when investing as a corporation:

What’s the purpose of the investment? First, think about what you’ll be doing with your savings. This will help dictate what savings vehicle is best suited for your situation. Then consider the following factors:

  • Taxes: As a small business owner, you have access to the small business tax rate which is typically lower than your personal tax rate. (See table below.) Also, as of January 1, 2019, the Federal Budget decreased the small business limit for corporations with a set threshold of income generated from passive investments.

2019 Corporate Income Tax Rates

  • Taxes on investment growth: Depending on what you invest in, you will want to review this as different asset types are taxed at different rates.

  • Timing: You can control the timing of the payout which means you could potentially defer paying out the money until you need it and determine if you’d like to pay it out as salary or dividend.

  • Creditor Protection: Sometimes, investments held inside a corporation can be vulnerable to creditors, therefore you may want to consider using a holding company or trust or pay out money to yourself personally. This can be complex and requires professional advice.

  • Capital Gains Exemption: If your investment grows too large, it may endanger your qualification for the lifetime capital gains exemption that ‘s available when shares of a qualified small business corporation are sold or transferred.

For business owners, before investing personally or corporately, it’s certainly worth seeking professional advice to ensure that it suits your individual circumstances.

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Your Financial Plan

It can be hard to keep track of all your financial information. That’s why we’re introducing the concept of a Rockmoor Financial Plan Guidebook. A GuideBook is a modern approach to keeping all of your financial information, including your investment portfolios and action plans, in one place.

With your own personalized GuideBook, you’ll have a consolidated summary of your entire financial life with step-by-step support at your fingertips. A GuideBook is key to keeping you informed, engage, and motivated about your financial future!

As your stage of life and goals change, we’ll update your GuideBook to help you stay on track with your goals. 

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Summarize your portfolio, properties and action plan.
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Access a modern, magazine-quality financial document.
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About Rockmoor Wealth Management

Located in Nanaimo on Vancouver Island, Rockmoor Wealth Management is a team of wealth management specialists with decades of experience specializing in providing quality financial advice in areas of financial planning, investments and insurance.

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1-250-618-0386

Info@RockmoorWealth.com

204-5160 Dublin Way
Nanaimo, BC, V9T 0H2
Canada

At Rockmoor Wealth Management, we work with our clients in identifying financial services options which are based on each individual’s specific needs. When it comes to investment and portfolio management solutions, we have established a referral arrangement with KAI Asset Management Inc. whereby we introduce our clients to the benefits of having a full discretionary managed account. For more information about BCV Asset Management Inc., Deluca Veale Investment Counsel,  KAI Asset Management Inc. and the services they provide, please contact us or visit their website at bcvassetmanagement.com, delucaveale.com and kaiasset.com.

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