The Business Game Plan
Two Reasons to go into business for yourself:
QUESTIONS
1
• How do I maximize value for sale?
Build to Sell
• How do maintain family harmony?
• How do I minimize operational disruptions?
2
• How do I create a legacy?
Build to pass
onto family
• How do I protect the value of the business
so it can fund my retirement?
REALITIES
• 50% of business owners have
NO transition plan
• 30% of business owners have
NO estate plan
• 30% of businesses survive to
2nd generation
• Only 10% of businesses
survive to 3rd generation
Structure: Challenges
OPERATING COMPANY
HOLDING COMPANY
• Active vs. Passive assets
Note: Small business deduction (SBD)
is only for OpCo not HoldCo
• Reduced rate for Dividend/Capital Gains
Tax Rate on Income from Corporation
ABI = Combine Corporation
• Interest Income in Corp is taxed
at max rate
+ Person = 43% (ON)
• Share Ownership
Note: $750,000 Capital Gains
exemption is for OpCo not HoldCo
?
W E A LT H
Interest + Corporation
+ Personal = 48% (ON)
FA M I LY
2 Key Questions:
1
How much do I need to retire?
2
How do I move assets from OpCo to my family tax effectively to unlock wealth?
Areas our process addresses:
OPCO/HOLDCO
RETIREMENT PLAN
ESTATE PLAN
• Payment of salary and/or dividends
• Income Splitting
• Trusts
• Creditor Proof Assets
• Tax Effective Corp Investments
• Flex Benefits
- Health Spending (HSA)
• Funding of Shareholder agreements
• RRSP or HoldCo?
• Redemption of shares over time
• Tax Free Universal Life Insurance
• Ongoing dividends and salary
• Portfolio Management Services
• Estate Freeze
• Use of trusts
• Funding of potential Capital Gains
• Probate avoidance
Insurance products available through IPC Estate Services Inc.