Guest guest Posted January 1, 2002 Report Share Posted January 1, 2002 >The differences in taxation laws between Canada and the US are >considerable. (snip) There are legal papers to be submitted each year as >well, so add a lawyer' fees (200.00 min +++) on top of that. The only paperwork (other than taxes) that needs to be submitted is the Annual Report and the filing fee in BC anyway is $35. You don't need a lawyer, you simply sign the form and send it in with your cheque. All it does is verify that the names and addresses are correct and keeps the corporation in good standing with the government jurisdiction that the corporation is incorporated in. One doesn't even need to be operating the business to keep the corporation alive. I've known people who've had corporations that weren't operating at all for over 10 years, but because they kept filing their annual reports and paying the filing fee, the corporations still exist and can be used again in future if that person wishes to start operating under that corporation again. >We don't have to pay taxes on our year end inventories in Canada. That >is so restrictive! I sure don't like that rule very much. Does that >mean there will be a lot of things on sale tomorrow? Dec. 31 year end only applies to proprietorships or corporations that have chosen that as their fiscal year end date. With a corporation you can choose any date in the year for your fiscal year end. Mine is Mar.31 for example. I think you'll find lots of retailers putting things on sale this time of year regardless. As to inventory, it can " cost " you tax wise. For example this past year we increased our inventory significantly, however that money that was invested in inventory doesn't " show up " really until that inventory is sold...then it becomes a cost of goods sold. At least that's the best I can explain it from what my accountant said ;-) Inventory can cost you in other ways too...if it's sitting there tying up funds and not moving...but as I discovered some time ago the concept of " just in time " inventory doesn't work in this biz and so it's quite irrelevant. If you don't have the inventory you can't fill the orders. The trick is trying to find the optimum level of inventory so that you can run your biz smoothly (and with less stress) without having too much excess on hand. Just a few more devalued pennies for the pile.... Here's hoping for a prosperous 2002 for us all! Sherri-Lee Gagnon Oshun - Your Wholesale Source for Quality Cosmetic Ingredients & Packaging www.oshun.ca Order online with our Miva Merchant Warehouse Storefront ---------- --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.306 / Virus Database: 166 - Release Date: 12/4/01 Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 2, 2002 Report Share Posted January 2, 2002 I do books for about 50 corporations, and I am impressed that you file your Annual Report yourself, not many do. I guess they don't know its as simple as it is. As for the inventory. Inventory is an asset and is only expensed when it is sold (that's when it becomes cost of goods sold). I have met people who have bought a ton of inventory in order to have a loss in that year, (and thereby not have to pay taxes). What they found was just the problem you suggested; they were overextended financially and had a lot of goods that would not be consumed for a long time. It tied up their money to the point they were forced to collapse the business. What a phone call to an accountant can do sometimes is certainly worth the call. The tax requirements in the states are much more complex than ours in Canada. We think PST and GST and income tax is a pain, you should see some of the calculations and forms they have to deal with. I used to do books for a construction company that was building the Quiznos stores in the US. Each state had different tax laws, drove me crazy. Construction in California was the worst!! Each invoice has to be broken down into 2 or 3 categories. Well enough of that, making soap is much more fun! Happy Soaping and Happy New Year The only paperwork (other than taxes) that needs to be submitted is the Annual Report and the filing fee in BC anyway is $35. You don't need a lawyer, you simply sign the form and send it in with your cheque Quote Link to comment Share on other sites More sharing options...
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