A business consumes a large portion of your resources, time and attention throughout its lifetime, and your family's financial security may depend on its success. Planning ahead can protect the business you've worked so hard to build, help you achieve your business goals and ensure your future prosperity. Some of our core business owner services offered at McRae Wealth Management Group include:
Tax Planning Strategies
To protect your investments, both business and personal, your business strategy should include carefully structured tax and estate planning components to ensure you have organized your assets in the most tax-effective manner and utilized the tax planning strategies that are available for the benefit of your business and your family. Some of our extensive tax planning strategies include:
Individual Pension Plans (IPP)
Setting up a retirement plan: Consider setting up an Individual Pension Plan (IPP) as part of your retirement plan. An IPP is a defined benefit pension plan that, in certain situations, provides greater annual contribution limits than an RRSP. IPP contributions increase with the age of the plan holder. Contributions to the IPP are tax-deductible for your corporation. The investments in the IPP grow on a tax-deferred basis and are only taxable when you start withdrawing from the IPP.
If you have surplus funds accumulating in your corporation, you may be taxed at a higher rate on the investment income earned in the corporation than if you earned this income personally (depending on the province/territory). You may also face double taxation on the assets within the corporation on death. Tax planning solutions are available that may help you address this problem. A corporate-owned tax-exempt life insurance policy can provide income protection for survivors, fund buy-sell agreements or pay capital gains tax on death. Life insurance premiums are generally not tax-deductible, but it can be advantageous to purchase life insurance through a corporation rather than personally. The corporation’s surplus assets can be invested in the insurance policy, grow on a tax-sheltered basis during your lifetime, provide a supplementary source of retirement income and be paid to your beneficiaries as a tax-free death benefit.
Succession or Sale of Company Strategies
Whether you intend to sell the business to a third-party, transfer it to family members, structure a management buyout or wind it up, advance planning can help you make better long-term decisions and increase the chances of a successful transition. It can increase the funds you will be able to withdraw to help fund your retirement, make management transitions easier and give you a wider range of options. In the next few decades, many small business will be changing hands. If you haven’t yet discussed a business succession plan, or even considered your intentions for the business when you retire, now is the time to think about it.
Mergers and Acquisitions Strategies
If you're thinking of selling your business over the next few years, now is a good time to start planning. The team at RBC Mid-Market M&A has access to an extensive network either through Capital Markets or through their own contacts. They can leverage RBC's international presence to find the best possible candidates either locally or internationally to buy your business. Some of our areas of expertise include:
Business divestitures: working with business owners to develop and execute a divestiture process designed to maximize the value of the business being sold
Acquisitions: assisting business owners in managing the acquisition process and proving useful resources
Buyouts: providing advice to business owners seeking a complete management or shareholder buyout