There Are Several Benefits to Incorporating a Business

question 8

Multiple Choice

There are several benefits to incorporating a business. Some of those benefits are:

• A) A tax deferral is available if the shareholder requires the corporation's profits for personal use in the year; the shareholder may participate in a registered pension plan through the corporation; and dividend payments may be deferred until after a shareholder has retired.
• B) There is greater flexibility to bring family members on board as owners; non-taxable benefits may be provided to the shareholder; and dividend distributions are deductible for tax purposes.
• C) Lower tax rates are often recognized; the shareholder may receive compensation; and the corporation offers preferable tax rates on the business' investment income.
• D) The shareholder may choose when they will receive dividend income from the corporation; a capital gains deduction may be available if conditions are met when shares are transferred to the shareholder's children; and active business income
• Under $500,000 is eligible for a lower tax rate.

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Definitions:

Goals

Specific, measurable objectives that individuals or organizations aim to achieve within a certain timeframe.

Social Connections

Relationships with other individuals or groups, providing emotional, informational, or practical support.

Happiness

A condition of happiness and satisfaction marked by feelings that vary from being content to experiencing profound happiness.

Spouses

Legally married partners or significant others in a committed relationship.