Paisley Pike,™ CPA

Business Owners

Efficient Use and Organization of Financial Assets

As a business owner, minimizing your overall tax burden while meeting your corporate and personal cash flow needs is a top priority. The efficient use and organization of your financial resources, will ensure that you have access to funds, when you need them, to achieve both your corporate and personal goals. There are several strategies that may be used in order to achieve and maintain this important balance. Some of these strategies relate to decisions about how you are compensated. Other opportunities can be derived from choices which consider how your corporate and personal financial assets are organized.

Compensation – Being a business owner, you are in a unique position. The nature, timing, and source of your personal cash flow and taxable income is at your discretion. Setting an optimal balance between salary, bonus and dividends from your company may offer significant tax savings and investment benefits while balancing the source and use of cash flow. You may choose to leave some of the profits in the corporation to take advantage of lower tax rates in a given year. This is especially applicable if you qualify for the small business deduction.

Organization – Putting in place specific corporate structures and trusts can provide business owners with additional benefits.

Family Trusts: Often setting up a Family Trust can provide additional tax savings opportunities. When properly set-up, business owners may be able to take advantage of income splitting rules with family members. This effectively lowers the family’s collective tax costs.

Holding Companies: At some point in time, business owners may also consider establishing holding companies in addition to their existing operating company. As part of the corporate organization, holding companies can be an effective vehicle to manage cash flow and investments. Most often, holding companies are used to

maintain excess funds that have been moved out of the operating company, or
maintain the proceeds from the sale of assets of an operating company

Your Investment Professional is key to helping manage the accounts within the various corporate entities that comprise your businesses. Your Investment Professional will be able to grow and maintain assets in each account, ensuring that they fulfil their intended purpose over time. You may be offered the expertise of Canadian and internationally recognized portfolio and money management, through which they will manage your account on a discretionary basis. Alternatively, your Investment Professional may also design and manage their own custom portfolio for you.

At PAISLEY PIKE, CPA, we take an integrated “big picture” view of our business owner clients and their financial resources to help reduce their taxes. We can help you by:

determining and then implementing the optimal mix and timing of your salary, bonus and dividend payments
establishing income splitting strategies across your family members
preparing required financial statements, tax returns and other CRA information returns to meet your goals

The PAISLEY PIKE Advantage: At PAISLEY PIKE, this integrated approach to tax planning for the income and investments related to the individual business owner, their family members, the operating corporation and any holding companies or trusts, is our specialty.

We work with your Investment Professional to minimize the taxes you pay. Paying less tax will, in turn, help you reach the financial goals that you and your Investment Professional have built into your financial plan.

At PAISLEY PIKE, we strongly recommend that you work with a trusted Investment Professional to provide advice about your investment needs. We actively work in coordination with your Investment Professional, to help you save on your taxes.

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JD Greenberg | When you need us. Where you need us. How you need us. 416.651.0200 | 844.651.0200
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The opinions, technical information and strategies contained on this website are for informational purposes, based on publicly available information that is believed to be accurate and complete. We cannot guarantee the information’s accuracy or completeness as information may change without notice. Users of the website are advised to consult with a qualified tax or legal professional prior to implementing any strategies in order to ensure that their specific circumstances and the most current information have been considered. This information is not investment advice. Readers are directed to consult with their trusted investment professional for investment advice.