When should I incorporate?

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Thinking about incorporating? Like any major decision, there are pros and cons to incorporating your business. Here’s the skinny on when to add that “Inc.” to your name!

The Good

  • Limiting Liability: Your business becomes its own separate entity, which means as a shareholder, you’re not personally liable for any debt it incurs, unless you’ve given a personal guarantee. Your personal assets cannot be seized to pay business debts, which can happen as a sole proprietor. Your business also has an unlimited lifespan, meaning it can exist regardless of ownership changes.
  • Tax savings: Corporations are taxed at a lower rate of only 13.5%. This is a great incentive for sole proprietors earning between $60,000-$100,000 on their personal tax returns.
  • Earnings: If you’re making $100,000 in gross earnings and plan on being able to save $40,000 per year, a corporation can be a good tax-preferred saving alternative to RRSPs.

The Bad

  • Government reporting: You’ll have to do more paperwork!
  • Increased costs and responsibilities: The cost of managing your books and taxes as an incorporated professional is more than as a sole proprietor.
  • More tax returns: You’ll have to file a corporate tax return, as well as, a personal tax return.

The Ugly

Incorporating alone will cost roughly $750,000 through a lawyer, which is recommended if there are multiple shareholders or assets to transfer. You can incorporate through the BC Corporate Registry for $350 online, as well.

Annual accounting costs can range from $2,500 for a simple corporation to $6,000 for an average small incorporated business. Even though this may seem high, it’s a low price to pay for piece of mind that your business’ finances are being properly and accurately looked after.

So there you have it. If you’re thinking of incorporating, come see us. We’re happy to walk you through the advantages and disadvantages as they pertain to your unique situation.

Catch up on your bookkeeping NOW

Bookkeeping, Vancouver, Small Business
Boo. It’s a hard-knock life….when you’re WAY behind…..

Does it feel like there’s never enough time to get to your bookkeeping? With the business expanding, do you find bookkeeping moves lower and lower on your To-Do list until it’s turned to that nagging voice in the back of your mind that you wish would go away?

Worry no more; Homeroom’s got your back. So let’s get to know each other! Simply fill out our client intake form, sit back and relax. This form will help us learn more about your business and give us the information we need to send you a proposal. Getting organized has never been so easy, you can do it from your couch!

Having organized books is important and helps you avoid an audit or limits the pain of an audit if it happens — with clean books, the CRA are able to finish sooner. It also saves time when you file and gives you a clear picture of your business’ financials.

Professional bookkeepers make sure you aren’t missing anything and that you’re getting as many breaks as possible, while keeping you aware of your business’ overall financial health by sending profit and loss statements and balance sheets.

Let us focus on what we love — your books! — so you can focus on what you love — your business!

Homeroom Client: Army Of Rokosz

jewelry, Army Of Rokosz, Andrea Rokosz, Vancouver, small business owner, metal arts, bookkeeping, Homeroom

This month’s featured client is Army Of Rokosz Jewelry Design and Metal Art, designed and created by Andrea Rokosz. Andrea uses ancient techniques to make her jewelry that is shaped by her appreciation for the unconventional and ornate. Her small wearable sculptures reflect her love for adventure, folklore, and pop culture, as well as, a respect for nature, history, science and religion.

When did you open your business?

I started Army Of Rokosz as a part-time gig while I was in jewelry school, but it wasn’t until 2013 that I left my part-time job to focus my energy on Army Of Rokosz full-time.

What do you enjoy most about being a business owner?

There are many facets about being a business owner that I absolutely love. I really enjoy the comradery that naturally exists between small business owners. I don’t have any formal business education so a lot of what I know and do on the business end of things has been learned from asking a ton of questions to people who have done it, or are doing it. In Vancouver, right now, there seems to be a lot of amazing people starting up their own businesses so having a community of like-minded people supporting one another is pretty inspiring.

What motivated you to start your business?

Honestly, I just started making jewelry and the response was so great that I followed along the path I was being shown. I never really thought I would own a business — I don’t know what I thought my end game was when I started making jewelry — but I am totally stoked things have turned out the way they did.

What’s your vision with your jewelry?

I really like to design things that I would want to wear, it’s what lights me up and gets me excited to work on a piece. I started out launching my line Army Of Rokosz — available online and in stores across North America — but now I work one-on-one with clients on custom pieces. There’s something extremely special about getting to know someone and being able to make their vision a reality as well.

What do you like about jewelry making?

I love it all! I feel very fortunate that I get to do what I do every day. When I sit down and think about the actual act of making each piece and the historical lineage of the techniques I use (passed down over thousands of years), it makes me feel like what I do is pretty special and important. I also really love getting to create ceremonial pieces, engagement rings, and wedding bands. The first time I watched a couple exchange wedding bands I had made, I got pretty emotional.

What advice do you have for future business owners?

Ask a lot of questions and hire a bookkeeper.

How do you achieve work/life balance?

For a long time, I didn’t. I work for myself, by myself. So when I first started out and was getting busier, I just defaulted to working all the time — which was crazy. As basic as it sounds, I put myself on a schedule, have set days and times that I work, and take weekends off. I love my time in my studio, so after a couple days off, I’m always geared up to get back to work.

Who would benefit from your services?

I think people reach out to me when they are looking for pieces that tell a story, whether it be a story that I’m telling through my collection, or one they want to tell with a custom piece. Everything I make has a meaning and significance behind it that has a unique way of resonating with people.

Connect with Army Of Rokosz on Facebook, Instagram, or Twitter.