Investment & Financial Articles
Title: Structuring Your Company
Author: William Cate
Article:
Structuring Your Company By William Cate Published October 1998
[http://home.earthlink.net/~beowulfinvestments/]
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
In Canada, you'll pay 60% taxes on your pretax profit. In the
United States you'll pay Federal and States taxes on your pretax
profit. This means that a California business pays 41% in taxes.
You make money when you save on taxes.
I'm not an attorney nor an accountant. I'd advise that you
discuss tax strategies with your tax advisers. I'm offering the
following from my business experience. I work on the premise
that you must pay taxes in the jurisdiction in which you earned
the money.
If you have a local business, don't incorporate in a tax haven
state, like Nevada. The taxing state will still want their taxes
on the money you earned.
Too many local businesses incorporate in such a way that the
corporation pays taxes on the business income and the owners pay
taxes on the proceeds from the corporation. If your corporate
pretax profit was $100 in California, after taxes your company
has $59.00. If you pay the $59.00 to the owners, they must pay
taxes and the after tax profit is $34.81. To avoid paying 65%
taxes, the owners should never have incorporated. They should
have asked their tax adviser about forming a LLC.
If you have a national business, incorporation in a tax haven
State may make sense. Compared to California, you'll save 8% on
your company's income taxes. If the State tax savings justify
tax haven incorporation, do it.
If you have an international company, incorporation in a tax
haven makes sense. It won't save your company taxes on your U.
S. or Canadian business income. It will save you 40%-60% on your
non-North American business income. This strategy is being used
by almost every multinational corporation in the World. It's an
inexpensive tactic that will save your company hundreds of
thousands of dollars. If you need help creating a tax haven
corporation, please contact me.
Whether you are a business owner or investor, you should
consider a global approach to money and investment. The
International Money School offers an excellent primer in sound
global money management. If you would like to attend the next
one-day course, please contact me.
To contact the author: Visit the Beowulf Investments website:
[http://home.earthlink.net/~beowulfinvestments/] Or, visit the
Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
About the author:
He has been the Managing Director of Beowulf Investments
[http://home.earthlink.net/~beowulfinvestments/] since 1981 and
is the Executive Director of the Global Village Investment Club
[http://home.earthlink.net/~beowulfinvestments/globalvillageinves
tmentclubwelcome/]
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