Have you been considering incorporating ?
Like many business owners, you’ve probably thought about it. And why not? After all, as a landlord, you have clients, or I should say tenants, and you are providing a service.
Incorporating your business has plenty of benefits, but first take a look at the definition of incorporation.
What is an incorporation?
Incorporation creates a legal entity around your business. It separates your personal income and assets from your rental property income and assets. By incorporating, you also protect yourself in the event the business encounters legal trouble or incurs any debt.
If you are thinking about incorporating your business, start by asking a lawyer. They can help you make sure that you’re doing everything that is needed in order to protect yourself and your business.
Are you still on the fence about
incorporating? Let’s take a look at the pros. Limited Liability protection – If you failed to incorporate and something happened to a visitor or a tenant on your property, you, as the business owner would be held personally liable.
This could lead to incurring a lot of
debt or even worse —bankruptcy. As
previously stated, by incorporating your
business, your personal assets are treated separately from those of your business. This means the corporation will be held liable and not you personally.
Taxes – Collecting rent on your property means an additional source of income on your taxes, and this can place you in a higher tax bracket. When you incorporate this separate your personal income from your business
income. Also, you get the added perks of you having the option of business tax deductions, including business expenses and medical insurance. So if you need to install that new stove or fix a leaky pipe you can write it off as a business expense.
