A guest column by one of the industry’s most respected brokers stoke the fires of discussion Thursday, encouraging brokers to discuss the ins and outs of incorporating a brokerage.
“If you have a small business let’s say making $100 thousand a year a business with anticipated losses and little legal risk you are far better off as a sole proprietorship,” Brian Lambert of Real Mortgage Associates wrote on MortgageBrokerNews.ca. “It is only after you are making a more significant income in the 100s of thousands of dollars and maybe taking on more risk should think of incorporating.”
The original article, “To be, or not to be? Incorporated, that is,” by Dustan Woodhouse
extolled the benefits of incorporating his brokerage business, which he has successfully run for 23 years.
“Carrying losses forward, income splitting, cleaning up write-offs, and perhaps the single biggest advantage - Corporate Asset Transfer investment strategy are all huge benefits of having inc. status,” Woodhouse wrote. “Being incorporated is likely the single greatest piece of my own retirement investment strategy. Bottom line: Be incorporated!”
And although the friendly banter that ensued focused on the pros and cons of incorporating, at least one reader came away interested in investigating incorporating for herself.
“I took Dustan's article to provoke thought and look into incorporating as part of your own overall business strategy,” Susan Ketler, a B.C.-based mortgage advisor wrote. “I don't think Dustan is advocating this as a one-size fits all solution, but rather something that should be considered.
“And of course before making this decision, you should be consulting a lawyer and professionally designated accountant.”