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BMO Nesbitt Burns
16775 Yonge St
Suite 221
Newmarket, ON
L3Y 8J4
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Business Owners

Strategies for Business Owners and Executives
 
Some of our clients are or were business owners, running companies in Canada and internationally. Here are some of the strategies we are able to offer to address their tax planning, financing and business succession needs.

 

Advantages of an Individual Pension Plan (IPP)

If you are a business owner concerned about minimizing tax, an Individual Pension Plan (IPP) might be right for you. An IPP allows you to:

  • Shelter more income from tax through increased contributions versus your RRSP each year.
  • Make a one-time deductible contribution to eliminate the contribution gap that exists between an RRSP and an IPP.
  • Protect your assets from creditors since assets held in an IPP are creditor-proof.
  • Deduct all fees through your corporation (which is not allowed by RRSPs).
  • Mitigate market losses by making additional contributions if the investment return is less than the stated objective
 
Tax management using flow-through shares
 
This is an important tax minimization strategy we often recommend for clients that earn themselves into a significantly high tax bracket. Here’s a simplified explanation:
  1. Designated mining companies that need access to capital are allowed to issue new equity shares at a higher price than their normal shares.
  2. Risk-tolerant investors purchase these shares, injecting much-needed financial strength into the resource sector.
  3. In appreciation for their willingness to take on that risk and pay the premium price, the government rewards these investors with a 100% tax deduction in the year of purchase.
 
Business succession advisory services
 
We will work with you and the BMO Business Advisory Team to create very detailed business or practice succession plans. Our considerations can include:
 
  • Calculating how much you would need to be able to step away from the business or practice and retire.
  • Estate equalization solutions to help you bequeath a fair amount to each of your children, whether they are involved in your business or not.
  • Liaising closely with your accountant, we will coordinate your tax planning, estate planning, family trusts, wills, second wills for your company or practice, and more.
  • We provide services you will need if your kids are not able to, or interested in, taking over the business:
    • Help hiring business valuators to assess the value your business (at least a ballpark number to use in wealth planning).
    • Guidance in finding the right buyer to get the best value:
      • Assistance to interview and consult with prospective buyers.
      • Guidance in negotiating.
      • Insights on what you should look for.
    • We will help you to prepare the company for sale to maximize its worth.
 
The BMO Business Advisory Team can assist you with multiple considerations, including:
 
  • Planning before ownership transfer, sale or transition
  • Education on the sale process
  • Pre-sale strategies and structuring
  • Insights on industry trends and values
  • Transaction planning and support
  • Potential risk exposure
  • Buy-sell agreements
  • Blue-sky multiples and underlying factors
  • Valuation considerations and insights
  • Macroeconomic indicators
  • General advisory, exit strategies and risk management
  • Sophisticated wealth transfer, estate and succession planning strategies
 
Commercial Banking solutions
 
When you need to borrow money or source capital to expand your business or practice, we will introduce you to our network of Private Bankers, Commercial Bankers, lending specialists and corporate finance specialists. Our team collaborates closely with you and these professionals and we dovetail their recommendations into your overall Wealth Plan.
 
We will connect you to the right financing opportunities according to your level of need:
 
  • Business Banking (< $1M)
  • Commercial Banking ($1 to $10M)
  • Corporate Finance ($10>).
 
Our Business or Commercial Banking professionals specializes in a number of industries and who understand and can manage unique challenges.