Understand the Value of a Holding Company
Holding companies can be a great tool for successful small business owners. Holding companies, or Hold co.’s, provide business owners with an opportunity for additional asset protection and tax savings. Unlike Operating companies, or Op co,’s, holding companies are not used in active business and are not revenue producing. They are mostly used for tax purposes as dividends can usually be transferred between corporations’ tax free. This allows for operating companies and holding companies to work together for business owners.
Key Person Insurance
Thanks to their size, small businesses usually rely on a few key people to keep operations running smoothly. Whether it is a front-line supervisor that runs the crews, a senior leader for slightly larger business, or the founder and owner of a company, the absence of key people can really cripple short-term results which can potentially place long-term business viability at risk.
Key Person Insurance is a risk management tool that helps to cover the loss of a valued contributor due to death or disability.
Estate Freezes 101
An estate freeze is a tax planning technique that allows a small business owner to freeze the growth of their interest in their company in …
Using Corporate Owned Life Insurance to Reduce Passive Income Taxation
Effective January 2019, new tax rules will come into effect that will have a dramatic impact on some small business owners. Starting in 2019, the Small Business Deduction Limit will be reduced by $5 for each $1 of passive income that exceeds $50,000 and will reach zero once $150,000 of passive income is earned in a year. This new tax rule may be leaving business owners wondering how they can redirect a portion of excess cash flow that would traditionally produce passive income, and subsequently some unfavorable tax consequences.
Corporate owned life insurance can offer a “two bird one stone” solution to business owners. If used appropriately, strategies such as these are a viable option for a private corporation with a substantial amount of excess income and a life insurance need. The information below provides an elementary overview of how life insurance can be used to defer tax and grow the corporation’s estate.
Insurance Audit for the Business Owner
Many business owners understand the important role that life insurance plays in effective corporate planning. Whether it is the funding of a shareholders’ agreement, life …
Family Business Planning Strategies
67% are at Risk of Succession Failure If you are an owner in a family enterprise, the chances of your business transitioning successfully to the …
What to do after selling your business
By James Dolan The contract is signed. The cheque is cashed. Your business has been sold or you’ve been given a golden handshake. Now what? It’s …
Protecting Your Business
While most business owners realize the benefits of corporate-owned insurance, many do not realize that flexible life insurance products such as permanent whole life can …
