Has anyone started a corporation for the purposes of holding your investments?

Hi there,

I'm based out of Canada, and am looking into whether it makes sense to start a company for the purposes of realizing some tax benefits on the money I'm making from investing. From what I can see, you basically have to keep the earnings inside the company or else you're paying around the same amount of taxes as if you invested as an individual. The only benefit I can see is that I can write off some business expenses.

Any thoughts on this?

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Comments (3)

Aug 15, 2014

Consider tax implications,ownership, liability, corporate structure, requirements, added costs of establishment and maintenance, ect..

The main question is: Why would you need a corporate veil to protect your investments? Unless other investors are putting capital through your investments (thus making you institutional), it would seem unnecessary IMO.

Aug 15, 2014

this.

the reason to title assets in a corporation, LP, LLC, etc., is to avoid liability from creditors because it's not your personal assets. there are several ways to minimize your taxes, from charitable trusts to defined benefit plans to common retirement plans, but I don't have the foggiest idea of the Canadian tax code.

the main piece of advice I'd give you is that there's no such thing as a free lunch, most developed governments have structured the tax code with a trade off between tax benefits and control, meaning the more control you have, the less tax advantaged you are (generally), and vice versa.

Aug 20, 2014