HomeMy WebLinkAboutThe Huron Expositor, 1999-02-24, Page 8a -TRE HURON EXPOSITOR, F.bewry 24, 111110
FINANCIAL ADVICE
FINANCIAL PLANNING ,STRATEGIES FOR YOUR FUTURE
Ir "orporate Now?
incorporate
yot.. 'uustness? Let's take
a look!
• A corporation is a
separate entity under law
providing limited
liability for its owners..
Creditors have a right to
the company's assets
only, unless, the owners
sign personal guarantees.
Another factor to
consider is the position
of director. Directors are
liable for certain debts of
the corporation: In the •
small business
corporation the owners
are usually the directors.
As you can see the
benefit. of limited
liability may not truly
exist if.you incorporate.
Another form of business
ownership may then be
feasible.
There are three main -
forms of business •
ownership: sole
proprietorship,
partnership and limited:
company (corporation);
Each ownership structure
has its advantages and -
disadvantages.
Investigate all forms
when starting a business
to match the right form ,
of ownership with the
business situation.
Some quantitative -
items to consider are the .
initial cost of
incorporation, the
ongoing cost of
incorporation and the
cost of terminating the . •
corporation. Each of
these requires -
professional assistance
increasing the cost of
doing business over the
other forms of
ownership.:
Qualitative
considerations are also
important. Do the owners
understand the corporate -
form? Are the owners
'ready to develop vital
ties with a lawyer and an
accountant? Is the
business ready to be
incorporated?
Some business
situations prohibit -
- ownership through
. incorporation -such as
public accounting firms.
They seem to be doing
well! Other owners have
the option but never
.. desire to incorporate.
Open your eyes, wide
before you leap!
I am concerned that
• .too many times small
business.owners.jump
into incorporation and.
end up regretting it later..
Worse yet. they. are not
aware that they should tie
• regretting it.
The corporate •
structure may be what is •
best for:you. Certainly, if
you have substantial
taxable income you
should seriously consider
incorporation. •
It is better to seek
professional advice and
plan what is best for your
business. It may save you
many headaches and
dollars in the long term.
Shawn W. Lester. C.A.
from the firm of
John A.M. Norris
Chartered Accountant
Beyond RRSP's
(NC)—tn the midst of
all the RR$P hype. it's
easy to lose sight of
other investment needs.
• Saving for your child's
education, starting your;
. own business or saving ••
for a major purchase can
easily get set aside due
to lack of time and
money. To ensure that.
none of your investment
needs get overlooked,
it's important to have an
investment plan.
'An investment plan
is like a road map, it
helps ytm-get-where'you--
want to go," says Chris
Lund, vice president of
marketing for Bank of
Montreal's investore.
"Without an investment
plan, you could spend a
lot of time driving
around in circles or
worse, making a wrong
turn that could lose you
money."
To develop an
investment plan that's
right for you, follow
these simple steps:
Identify your
investment goals.
Make a list of all the
things you want to save
for. Divide the list into
savings you'll need in '
the short-term (less than
5 years). savings you'll
-need in 5-10 years and
long-term savings (10
years or mare).
Evaluate your
tolerance for risk.
Do you lose sleep
when the market drops a
point or do you like to .
play the market, and go
along for the ride? Your
investments should
reflect your personal•
risk tolerance level and
your investment - -
horizon. The longer your
investment horizon, the
-.-more- time you have to
make-up any lost ground
due to periodic Market
corrections. So, your
risk tolerance may vary
depending on your
investment needs..
Select the
igvestments that best
meetyour needs.
Choose a mix of
investments from
different asset classes
(e.g. cash, fixed-income,
equity) for each of your
investment needs. Talk
to an investment expert,
like the staff at
investore, to help you
decide which
investments are right for
you. .
News Canada
RSP Questions and Answers
(NC) -Here are answers.
- to some commonly -
asked questions about
registered retirement
savings plans.
Remember, your
..personal banker is -
:another great source for,
'information about RSPs.
Q': What is the best.
time to start an RSP or.
to contribute to an RSP?
A; The best timeto
start or to -contribute is
as soon as you have
earned. income, and as
early as possible in the
current tax year. To .
make the most of your
RSP advantages, you
;should contribute as'
early as possible each
•
year.: •
Q: When is the
annual contribution
deadline'' -
• A: To he eligible -for
- an RSI+-deduction:in a
specific tax ,year;
contributions can he
made any time during
the year. and. up to 60
day; into the :following
year. The deadline for
the . t99K tax year is
March t , 1999.
Q: what type off
income i. eligible -when
1 calculate ,nv maximum--
RSP..contribution this -
year•' . +
A: -The key
component for :most
Canadians is salary - the
. gross 'amount minus •
Union or.professional
dues and claimed
employment expense
BUT before deduction,
• for income tax,
unemployment
insurance and the
Canada or Quebec
pension plans, which are
withheld by your
employer, if"you're self-
employed or the partner
in a firm, earned income
is the income from: .
carrying on the
business. Other sources
include taxable alimony.
maintenance and child -
support payments,
royalties from works or
• inventions that are •
created. net real estate
rental income; disability
pension income from the
CPP orQPP,- research
grants and tips and
gratuities. -• •.
Q: What if I ion a
member -of a company•
pension plan•'
A: Members_ of
company -sponsored
registered pension plans
are entitled to the game
contribution limit as
-non-members: IS per..
cert of the previous
year's earned income.
up to the-maXimum
established -by the
federal government, less
the amount referred to
as a pension adjustment.:
Your PA is reported on
the T -i slip that you
eceivelrom your
employer. --
Q: Can.I transter
RSP funds- from one• •
plan to another'
A: Yes. if the funds
We'd
IB
like to contribute
to your RRSP
• Protected Mutual Funds
• GICs
• Prime Rate RRSP Loans
• Professionally Managed Accounts
OPEN EXTENDED HOURS
FOR RRSP SALES ,
Feb. 25 - 9:30 am -8 pm Feb. 27 - by appointment only
Feb. 26 - 9:30 am -8 pm March 1 - 9:30 am -8 pm
Better advice. More Options.
On your terms.
527-0100
MFARM M UT UA L
_ERN141YCIAL _SERVICES INC.
497 Main St. South, Exeter, ON. NOM TS1
Toll Free 1 -877 -206 -FARM (3276)
Your RSP &
RSP Loan Centre
..' ohn Hanson
(Exeter)
235.4000
Barb Worden
(Stafa)
345-2777
Joe Uniac
(Mitchell)
348-9012. •
Dean Whalen .
(Goderich)
524-5222
Norris Peever
(Goderich)
524-6105
Bob McNaughton
(Sealorth)
527-1571
Graeme Craig . Ken Hutchison
(Walton) (Mitchell)
887-9381 - • 348+9150
!8; BP1' A..�.,.TRtM�R!c
t1 ammo -
lemplg9n
i
gtr?AM to
go directly to the new
• plan. ,But remember. if
the investment - such as
a Guaranteed
Jnvestment .Certificate
has 'a -fixed. term. you -
may he charged a
penalty. As well. some
institutions may charge
a.transfer fee. •
-
•- Q: Cm a -Canadian
citizen but worked out
-of 'the countryin tfie.
previous year. Can I
contribute to.my RSP
=this year''
A: Generally, rhe -
answer i ••no•', if you
• had no Canadian earned.
income during the year.
However, if y.ou have '
unused contribution
room carried over from
previous years:Revenue
Canada will allow u.
Q:'I've heard about
Locked -in Retirement .
Accounts.. What are.
they - •
- - A. If you leas--,, your
lob and have -%e ted
Tension benefits -from• -
vour employer'- plan.
rhos iUnd• Lan.hc
rolled o+er into a
Lurked -in Retirement
:account. ,trso known as '
a LIRA. Generally you
cannot withdraw fund,
from a LIRA untiryou
are age 55. or earlier it
the applicable pension
regulations permit.
Q: What about the
lifetime over
cnntribution itlli�+vanr� '
• A: This lifetime
$2,000 amount provides
a buffer forpeople who
. make estiniated
contribution's abo+e the
allowable limits.
t.Q:.What are -the rules
t:or.withdrawing money
from an RSP"
.A: You -can withdraw
money from your RSP
in any -amount. but
reinenihe.r you will he
taxed at source.• "
Withholding taxi . '
-.Calculated as -a
• percentage. of the total
.amount of the
withdrawal; must be •
..held.hack by the plan -
;tdministrator" and -
remitted to the .
. 1,overnntent on your
hehalt..
News ('amnia
•
Professional accounting,
taxation, succession planning
and management advisory
services for agricultural and other
agri-related business
A
John A.M. Norris
CHARTERED ACCOUNTANT
370 Main Street, South
P.O.Box 2410
Exeter, Ontario NOM 1S7
Tel: 519-235-3240
Fax: 519-235-3246
Toll Free: 800-661-6344
1211ain Street. No_ rth
P.O.Box729
Seaforth, Ontario NOK IWO
Tel: 519-527-0672
S�VORTH 519-527-0331
rall': ree: 888-606-6146
www.jnorrisca.com
John Norris, C.A.
Shawn Lester, C.A.
When You Invest With Us.
You Invest In Your Community,.
Your RRSP deposits are used to assist our borrowers .
who are your friends and neighbours in the
community. .
Choose from a variety of options.
• •Fixed Rate GICs
•Regular RRSP Deposit Plans
(Weekly, Bi -weekly, Monthly)
_ •Index Linked Term Deposits
*Mutual Funds --__. _. .___......
•RRIFs
Each RRSP & RRiF contract is insured
individually for up to $60,000.00.
RRSP Loans at Prime
(1 year term - flexible repayment options)
OR
MAXIMIZE YOUR RRSP this year by using all or
part of your unused RRSP Contnbution Limit with a -
Clinton Comrunity Credit Union Catch Up Loan -
(competitive rates for 2-5 years)
Our office will be open on Saturday, Feb. 27, 1999
from 9:00 a.m. to 1:00 p.m. for
RRSP Investment purposes.
DEADLINE for your 1998 contribution is
MARCH 1, 1999.
CLINTON COMMUNITY
CREDIT UNION
48 Ontano Street 118 Mem Street. North 165 Main St. W..
CLINTON 482-3467 EXETER 235-0640 • DASHWOOD 237-3777
cruor cuoodyseey.on.ca exeiercueoigysssy cowl Tues. 10 am -3 pn Fn. 2-7 v^
www.tliritonar.on ca
ORA let bTM%900am-500pm Flt.9004+1400pm