We recently helped a client continue his Alberta corporation into Ontario after he relocated from Calgary to Waterloo.
At first glance, incorporating a new Ontario company may have appeared to be the simplest option. However, the existing corporation had valuable history and assets, including retained earnings, established tax attributes, and a corporate owned life insurance policy.
Closing the Alberta corporation and starting a new one could have created unnecessary tax, legal, insurance, and administrative complications. Instead, we completed a corporate continuance, which changed the corporation’s jurisdiction from Alberta to Ontario while preserving the existing corporate entity.
This allowed the client to continue operating through the same corporation, without losing its history or having to transfer its assets and insurance policy to a newly incorporated company.
The lesson is simple: when a business owner moves to another province, forming a new corporation is not always the best answer. The existing corporation may contain considerable value that should be reviewed carefully before making any changes.
If you have moved to another province, or are planning to relocate your business, feel free to contact me. A proper review before restructuring can prevent unnecessary costs, taxes, and complications.
Balbir Singh Saini, CPA, CGA Empowering Entrepreneurs to Build Freedom and Wealth Through Smart Tax, Financing and Commercial Real Estate Projects
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