Investing for Business Owners

Many business owners have built up earnings in their corporation and are looking for tax efficient ways to pull the earnings out to achieve their personal and business financial goals such as:
  • building and protecting your savings

  • providing for loved ones

  • planning for retirement

Factors to consider 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. Then consider the following factors:

  • Taxes: As a small business owner, you have access to the small business tax rate which is typically lower than your personal tax rate. (See table below.) Also, as of January 1, 2019, the Federal Budget decreased the small business limit for corporations with a set threshold of income generated from passive investments.

  • Taxes on investment growth: Depending on what you invest in, you will want to review this as different asset types are taxed at different rates.
  • 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, therefore you may want to consider using a holding company or trust or pay out money to yourself personally. This can be complex and requires professional advice.
  • 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 small business corporation are sold or transferred.


For business owners, before investing personally or corporately, it’s certainly worth seeking professional advice to ensure that it suits your individual circumstances.

 Office supplies

Financial Planning for business owners is often two-sided:

Personal and Business Financial Planning.

Business owners have access to a lot of financial tools that employees don’t have access to; this is a great advantage, however it can be overwhelming too. A financial plan can relieve this.

A financial plan looks at where you are today and where you want to go. It determines your short, medium and long term financial goals and how you can reach them. For you, personally and for your business.

  • Why do you need a Financial Plan?
  • Worry less about money and gain control.
  • Organize your finances.
  • Prioritize your goals.
  • Focus on the big picture.
  • Save money to reach your goals.

Business owners – Personal and Business finances are connected

What does a Financial Plan for a Business include?

There are 2 main sides your business financial plan should address: Growth and Preservation


  • Cash Management- Managing Cash & Debt
  • Tax Planning- Finding tax efficiencies
  • Retaining & Attracting Key Talent


  • Investment- either back into the business or outside of the business
  • Insurance Planning*/Risk Management
  • Succession/Exit Planning
  • What does a Personal Financial Plan include?

What does a Financial Plan for a Personal side include?

There are 2 main sides your financial plan should address: Accumulation and Protection


  • Cash Management – Savings and Debt
  • Tax Planning
  • Investments


  • Insurance Planning
  • Health Insurance
  • Estate Planning

Financial Planning and Tax Minimization Strategies for Mature Families

You are a middle-aged person at the peak of your career, and everything is going to plan. You just got promoted to a senior role, which comes with a handsome pay package and a wide range of benefits. Your children are either in college or employed and planning to start a family. This is the best time to devise an effective financial plan that will set you up for life.

Pay Off Mortgage

Since you are at your peak earning years, you should use the extra income to fast-track your mortgage payments. Some of the strategies to paying off your mortgage faster include making biweekly payments, paying an additional amount against the principal every month, every year, or re-writing or refinancing the mortgage if you can improve the terms and avoid undue penalties. These strategies will reduce the number of years it takes to clear your mortgage and the total amount of interest you pay to the lender.

Reduce Debts

Take a review of all your debts, bills, and other financial obligations to see how much you owe. If you have loans, start by paying off all the high-interest loans. You can also request your bank to consolidate your debts and agree on a realistic, low-interest payment plan. Make sure you clear all your bills in time to avoid penalties. Reduce the number of credit cards you use and make sure you pay cash or use debit cards for most of your purchases.

Save For Retirement

If you are employed, make sure you participate in your employer’s retirement plan. Most employers will match your contribution or add a percentage of your salary to your retirement account. If you are self- employed you should open an RRSP if you don’t already have one. An RRSP is one of the most popular ways to save for retirement in Canada and your contributions are tax-deductible. In short, it will boost your retirement savings and reduce your tax bill.

Stay on Budget

With new perks, you may be tempted to upgrade your lifestyle. However, it is important to ensure that you are not spending more than you are making. Make a budget that accounts for all your recurrent expenses such as fuel costs, bills, and rent before deciding to buy a new car or make any other lifestyle changes. Make sure you are left with some savings after accounting for all expenses and staying on budget.

Tax Minimization Strategies

Take a comprehensive review of your income, including salary, earnings from investments, and any other asset or business venture that attracts taxes. Review your tax returns for the past couple of years and use them to devise a tax minimization strategy. You can use income deferral options such as registered retirement saving plans, deferring capital gains, and investing in certain types of life insurance. Another approach involves splitting your income and distributing it to lower-taxed family members through spousal loans, gifting assets to children and joining education savings plans. You may also be able to take advantage of various tax credits such as caregiver and tuition.

Buy an Insurance Policy*

Take care of contingencies such as disability, debilitating illness, or premature death by having insurance coverage. Buy insurance that will provide for the medical costs of a critical illness. Life insurance protection provides financial resources for the remaining family members in the event of your premature death. We can design a plan where your insurance premiums will be waived if you are disabled.

Write A Will

Prepare a will outlining how your estate will be distributed after you die. The will should name guardians for any minor children and elect an executor to settle any debts or taxes owed by your estate. The executor’s role is also to make sure that your assets are distributed according to your wishes. Review your will regularly to ensure it remains current according to your circumstances and any changes in government legislation or taxation.

Consider Power of Attorney

The power of attorney states who will make decisions on your behalf in case you are incapacitated by disease or old age. It can empower family members to make critical decisions that affect your health and finances.

Work with Professional Financial Advisers

Making a solid financial plan is a complex process that may require the assistance of financial planning and investment professionals. Accureta Wealth Management is a part of IA Private Wealth and helps clients plan their finances through smart tax minimization, investment, and retirement planning strategies. We go with our clients throughout the journey, enabling them to approach the future with confidence and financial security. Contact us to speak to our wealth management professionals.

Talk to us for your Business Investing Needs