How to set up a business (advertising)

[HiTempguy1]

I don't typically ask questions in the finance section as I don't have much finances going on, but I recently had an idea and want to try and run with it.

How would I go about starting a business that sells advertising services? I would assume starting up a company like this (one man operation) would be the same as anything else where you contract yourself to do work/advisement for other people, essentially consulting; is that a reasonable assumption to make?

I don't plan on the business making a TON of money, mainly a side gig unless things really got rolling.

What steps do I need to take to get this started? I'm reading the gov of Alberta information, which is great, but it's quite detailed and a bit of an overload for my current sick day/sleep deprived self. Since the Beyond crew has experience in this, it made sense to ask.

Thanks for any info you can provide!

[dr_jared88]

Before you do anything you need to decide if you are going to incorporate or go sole proprietorship. Both paths are quite different so I suggest reading up on both options and make that decision first.

[skandalouz_08]

Originally posted by dr_jared88
Before you do anything you need to decide if you are going to incorporate or go sole proprietorship. Both paths are quite different so I suggest reading up on both options and make that decision first.

If you're just doing it as a side gig and don't expect to be sued for work being done poorly or shady business practices go sole proprietor. Not worth the hassle and cost of incorporating if you're making very little money every year.

On the opposite side, if you have a salary that already puts you in the top tax bracket (or close) incorporating would be worth it to leave earnings in the company or take in a more tax efficient way (dividends).

[A790]

Originally posted by HiTempguy1
I don't typically ask questions in the finance section as I don't have much finances going on, but I recently had an idea and want to try and run with it.

How would I go about starting a business that sells advertising services? I would assume starting up a company like this (one man operation) would be the same as anything else where you contract yourself to do work/advisement for other people, essentially consulting; is that a reasonable assumption to make?

I don't plan on the business making a TON of money, mainly a side gig unless things really got rolling.

What steps do I need to take to get this started? I'm reading the gov of Alberta information, which is great, but it's quite detailed and a bit of an overload for my current sick day/sleep deprived self. Since the Beyond crew has experience in this, it made sense to ask.

Thanks for any info you can provide!
Make sure your books are clear and correct. For the $1,000 it will cost you to incorporate I'd recommend it, especially because your tax rate on dividends is 19% for the first $500,000 as opposed to that being applied to your regular income tax return (you're probably paying more than 19%).

What type of advertising are you doing?

[Sugarphreak]

...

[Mar]

If you're making less than $39,000 a year you don't need to register at all, just claim income on your income tax as usual. The benefit of registering is that you can get a GST number and charge your customers GST which you definitely should do. And if you make less than $9000 you don't pay tax on it at all.

Go to any DMV and register a trade name of any name you like. They'll do a search for you (sometimes costs $10) to see if it's available and then let you register it for somewhere around $60. That gives you a business number which is what you need to claim your taxes as a business and set up business bank accounts and such.

Call the 1-800 number for a free GST number and you're done. I have to do this part today actually, I've been getting GST without a number for 2 years. Oops.

Once your business starts making more money you can incorporate it if you want.

[e36bmw///]

nm

[JudasJimmy]

Originally posted by A790

Make sure your books are clear and correct. For the $1,000 it will cost you to incorporate I'd recommend it, especially because your tax rate on dividends is 19% for the first $500,000 as opposed to that being applied to your regular income tax return (you're probably paying more than 19%).
Plus 17% corporate tax on company earnings.

[Sugarphreak]

...

[JudasJimmy]

Originally posted by Sugarphreak


Not sure where you are getting your information from (maybe from Mar?) but you are mistaken.

The combined rate (federal and provincial) is 26.5%, then with the SBD (small business deduction) applied it goes to 14%

http://www.albertacanada.com/about-alberta/competitive-corporate-taxes.html
haha. woops. Ya I ment %14. point was that you get taxed twice. One at the corporate level, once at the personal level (Dividends, or wages paid to you, from your company). Total tax payed has to come from somewhere, it comes from you. Corporation or no corporation.

[Sugarphreak]

...

[HiTempguy1]

Originally posted by JudasJimmy

haha. woops. Ya I ment %14. point was that you get taxed twice. One at the corporate level, once at the personal level (Dividends, or wages paid to you, from your company). Total tax payed has to come from somewhere, it comes from you. Corporation or no corporation.

This works well, as the company would be using most of the money that came in. SP made a reference as to why this would be.

This is some really good info guys, I appreciate the help.

I also read that if earnings are under $30k per year, you are not required to collect gst?

Edit-
For what I am doing, having a "company" with a physical name that is not *me* is relatively important.