Investing for Business Owners
When Investing As A Corporation
What’s the purpose of the investment? First, think about what you’ll be doing with your savings. This will help dictate what savings vehicle is best suited for your situation.
Factors To Consider When Investing
Taxes
As a business owner, you have access to the small business tax rate which is typically lower than your personal tax rate.
Timing
You can control the timing of the payout which means you could potentially defer paying out the money until you need it and determine if you’d like to pay it out as salary or dividend.
Creditor Protection
Sometimes, investments held inside a corporation can be vulnerable to creditors, you may want to consider using a holding company or trust or pay out money to yourself personally.
Capital Gains Exemption
If your investment grows too large, it may endanger your qualification for the lifetime capital gains exemption that ‘s available when shares of a qualified corporations are sold or transferred.
Get Professional Advice
For business owners, before investing personally or corporately, it’s certainly worth seeking a Wealth advisor to ensure that it suits your individual circumstances. Sometimes, these decisions can be very complex and require professional advice.
