Need help regarding consulting and Sole proprietorship please.

[Twin_Cam_Turbo]

Maybe some of you can help me. I recently started doing some consulting work as a second job. The owner of the company I am consulting for is suggesting I start a Sole proprietorship, as I can write off some advertising etc costs at events I am going to. I have absolutley no knowledge on this kind of thing. I am doing this on the side besides my full time job at the moment. Can anyone walk me through what I should be doing or considering, whats right and whats wrong in this instance?

Thanks.

[schocker]

From what I remember, you I went online through the government websites and registered for a business number, using my name as business and home for address and also got a GST number as you need it if you will be making more than $30k a year. I then just invoiced to myself using the business number and GST number.

[Hallowed_point]

At a minimum you should get contractor liability insurance. WCB is generally not needed as long as you don't employ anyone. Stay organized with your receipts and read up on eligible expenses for write offs on the CRA website. Don't go crazy with write offs. I have a buddy who wrote off chocolate bars along with his gas receipts for business related travel. Not sure that they will be happy with him expensing snickers & twix bars lol.

[Sugarphreak]

...

[Hallowed_point]

^You can write off direct business expenses such as: liability insurance, a portion of your cell phone bill. Unless my accountant has been screwing up that is.

[Twin_Cam_Turbo]

Hopefully someone can clarify the differences please and what I need to do. I'm not finding a lot of good info online.

[Hallowed_point]

You're really going to have to do your own research and talk to a tax professional. Lots of mitigating circumstances and matters of interpretation at hand. Any reason they can't make you an employee? Being a contractor is a pain in the ass unless the $$ makes it really worthwhile. It's a lot more stress imo.

[Twin_Cam_Turbo]

It's a one man automotive company, he's trying to help me out with various costs of racing etc as I am part of a lot of communities and go to a lot of events to talk to people and advertise.

[sabad66]

Here's a good summary of the differences between sole prop vs. corp:
http://www.canadabusiness.ca/eng/page/2853/

One key thing to keep in mind is that a corp tax return costs at least 1000-1500/yr for an accountant to do, so if you aren't making a lot of money from this business it might be more cost effective and simpler to go with sole prop.

EDIT: another good link:
http://www.taxtips.ca/smallbusiness/incorporate.htm

[Twin_Cam_Turbo]

Originally posted by sabad66
Here's a good summary of the differences between sole prop vs. corp:
http://www.canadabusiness.ca/eng/page/2853/

One key thing to keep in mind is that a corp tax return costs at least 1000-1500/yr for an accountant to do, so if you aren't making a lot of money from this business it might be more cost effective and simpler to go with sole prop.

EDIT: another good link:
http://www.taxtips.ca/smallbusiness/incorporate.htm

Thanks. What would you define as a lot of money?

[Sugarphreak]

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[suntan]

Lots of places won't work with sole proprietorships, so you might need to consider that eventually.

[Mibz]

If you're doing one job for one guy on the side, and it will remain a secondary source of income, it's not worth your time or effort to do anything but pocket his money and claim it as personal income. I'm willing to bet your "expenses" are between zero and $who-gives-a-fuck anyway.

Keep it simple.

[msommers]

Completely depends on your personal situation, where and what you're doing with the side business. Also depends on how much extra money this is bringing in, to IMO make this all worthwhile.

There's more to a business than getting a number and starting to write-off everything under the sun.

Talk to an accountant.

[Twin_Cam_Turbo]

I'm probably only going to make $10k-15k a year doing this, probably not worth my time to mess around getting a business license etc as it appears even to "consult" from your home you need one. At least from the research and people I've talked to.

[jacky4566]

Originally posted by Twin_Cam_Turbo
I'm probably only going to make $10k-15k a year doing this, probably not worth my time to mess around getting a business license etc as it appears even to "consult" from your home you need one. At least from the research and people I've talked to.

Only if you tell the City :)

Under the GST limit of 30k and i wouldn't worry to much.

[DJ_NAV]

PM me if you would like. I am a CA and deal with this stuff all the time.