You did it. You put months of heavy contemplation into concrete action and incorporated your small business. *Confetti drop*
We hope that this post will help guide you to successfully move forward with your new corporation.
First things first
You need to pick a date when you will start operating under the corporation. Usually the 1st of your chosen month is recommended. Once you have picked a starting date you need to allow around 2-4 weeks to get the following accomplished;
You need a completely new set of books/accounting records.
Your old books cannot be rolled over to your new company, no if’s but’s or maybe’s. The time of the year when you were a sole proprietor will be included in your personal tax return, while any business expenses that were incurred after you became incorporated will be included in your corporate tax return.
Figure out how you are going to organize all the new paperwork
Now that you are incorporated the amount of paperwork that you will need to deal with is going to increase tenfold so you need to have a good filing system in place to manage everything.
What you need to change
There are three very important areas of your business that you will need to change.
Since a corporation is a separate entity, you now need to apply for all new tax registration numbers including GST, PST & payroll numbers.
You will need to apply for a new WorkSafe BC account. Make sure to include your current WCB number so that you get your rate information transferred over.
You will need to open new bank accounts and apply for a new company credit card.
TIP: While doing this we recommend that you utilize this time to develop a relationship with your banker as it will come in handy later.
Other Important Reminders
Remember to put your new GST and PST numbers on your invoice template
Track your accounts receivable and accounts payable separately before and after your designated start date for using your corporation.
Inform your insurance company to update the policy with your corporate business name.
You may need to put some of your personal cash into the corporate bank account. Make sure that you track this.
If you are considering becoming incorporated and would like to discuss your options face-to-face with Teya our business consultant and tax expert you can make an appointment by calling us directly on 604-739-9536 or by requesting an appointment through our contact us page.