I am wondering how should I register my business? I don't like sole-proprietorship.
@Ebuka Atueyi You should discuss this with a CPA in your area. Your choice of entity depends upon where you are located and what type of business you are in. Both a corporation and an LLC provides liability protection as long as you operate them as separate entities from yourself and follow your state's rules for maintaining limited liability status. Typically, its a good idea to setup an LLC which gives you the most options for the future. LLCs are pass-through entities, so you only pay tax once on net income. If you buy and hold rentals, then you will want to keep them in LLCs taxed as a sole proprietor or partnership. If you wholesale or flip properties, then you can elect to be taxed as an S-Corp once your LLC begins generating net income greater than what would be considered a reasonable salary for your area (discuss with your CPA). If you setup a corporation, instead of an LLC, then you may want to elect S-Corp status so that the corporations income will pass-through to you and you will avoid corporate income tax. This is a very simplified explanation of your options and you should discuss this with a CPA in your area and come up with a plan specific to your situation and goals.
Originally posted by @Bob Norton :
I live in Canada. There are no LLC's.
I live in Canada
@Ebuka Atueyi That wasn't obvious from your original post. You should definitely check with a local tax adviser and/or attorney to determine what the best structure would be for your business.
For liability purposes you should use a corporation
The challenge will be getting a mortgage with that corporation
Can you give more info about what kind of business? Within real estate, there are many business opportunities. Who will be in business with you? Why don't you like sole-proprietorship? Your current situation? Food for thought: If you want a better answer, ask a better question.
Originally posted by @Huong Luu :
I want to build a large portfolio and invest in different asset classes.
Originally posted by @Huong Luu :
I want to start a capital investment crop.
@Ebuka Atueyi How large is large to you? How much experience do you have with owning and running a business? I am assuming you have the education and financial means to invest in asset classes. When you say capital investment corp... do you mean having people give you their money and you would invest it for them? If so, I am assuming you have a license/designation to do this. Then you would definitely have to register your business. It is no longer a question.
In Canada you are limited to options on how to own property and protect your personal assets from lawsuits resulting from your running a rental business. I recommend looking up Cherry Chan and consuming all of her blog posts and articles on her website. She has a checklist that will determine what your goals are/if a corp is right for you, and the right structure to hold it. The key will probably be getting your passive income rental (50% tax) converted to actice income (15%tax)Remember to begin with the end in mind. Not how much you make, its how much you keep. I started a few corps as i am intending to leave legacy wealth for my dissabled son. Side note, I had a brain anyorisim a year and a half ago. In the hospital for 6 weeks, could get lost in a washroom, no short term memory. I had a 40k emergency fund and disability insurance, however I had leveraged out my home to finish our 36 unit school conversion project. Hammering disability payments to sevice debt on a property you will never live in..... And you may not be able to return to your six figure + JOB. Bad times. I have since returned to work, finished and financed the school. Now that the dust has settled, i realize that i never increased my net worth faster than doing the funky chicken in the hospital. Gotta love real estate...