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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