Should You Incorporate Your Contracting Business in Canada?

At some point after starting your contracting business, you'll probably start wondering whether you should be taking steps to incorporate. Whether this is the right move for you will depend on the size of your enterprise, the amount of income you're taking in annually and whether you have personal assets you need to protect.

you're already self-employed, since you work for yourself; What's the difference if you decide to formally incorporate your contracting business in Canada?

Self-Employment

Whether you're a lone wolf or have a business partner and choose to stay as you are, you (or both of you as the case may be) are personally responsible for any debt incurred on behalf of the business.

You also have to pay taxes personally on all of the business income you're taking in. As far as the Canada Revenue Agency (CRA) is concerned, you and your business are one and the same for tax purposes. However, you can deduct your business expenses from what you make.

Incorporation

When you make a choice to incorporate, you create a separate entity before the law and CRA. It is separate from you and anyone who owns shares in the corporation. Once you incorporate, legal liability is transferred to the corporation. As a result, your personal assets are protected, as well as those of any shareholders, if any legal action is ever taken against the corporation.

After incorporation, you'll become an employee of the company. you'll receive a salary and no longer be self-employed. The corporation is responsible for paying the employer?s share of the withholding taxes.

Where Will your Corporation Operate?

Once you make the choice to incorporate your business, you have to decide where you're going to carry on business. Determining the jurisdiction is important, since you need to decide whether you want to incorporate in one of the 13 provinces or territories, or federally.

? If you're living close to a provincial or territorial border, is it likely that you'll be conducting your business in more than one province or territory?

? Will your company name be used in more than one province or territory? Do you need federal name protection for your business?

? Does your company have an unusual name that requires protection under federal incorporation?

Federal versus Provincial Jurisdiction

Federally incorporated companies are formed under the auspices of the Canada Business Corporations Act. They can carry on business anywhere in Canada.

Corporations incorporated under provincial jurisdiction are done pursuant to each province?s applicable law. The specific provisions can vary, depending on the jurisdiction. A corporation created in this manner can only carry on business in the province or territory where it was incorporated. For example, a corporation incorporated under Ontario law can only carry on business in Ontario.

If you decide to incorporate under provincial or territorial law, you have to register an address within the province or territory of registration. Your best bet is to choose the address where you currently reside.

Extra-provincial Registration

Provincially registered corporations that wish to conduct business in a province or territory other than the one of initial registration must go through the process of registering the corporate name in each additional province or territory. If another company already has the exact name or a similar one registered, it's possible the corporation?s name could be denied even though it is being legitimately used in other parts of the country.

To avoid the possibility of this situation arising, you can incorporate the company federally from the outset. It will provide protection for the company name nationally, with the exception of Quebec. Once a corporation has registered a name, no other company can use it.

Choosing Directors and Officers

Before giving any instructions to your lawyer, you have to decide who will be the directors of the company. Depending on the jurisdiction where you decide to incorporate, you may be required to appoint a certain percentage of Canadians as officers.

Cost of Incorporating your Business

It will cost more to incorporate your business federally, since you may be required to pay both federal and provincial filing fees. Exceptions are made for businesses located in Ontario and Prince Edward Island, which do not require separate provincial filing fees for federally incorporated businesses.

You must also take the cost of legal fees into account, the preparation of a minute book and a corporate seal, as well as other costs of incorporating your business.

Before making any final decisions about whether to incorporate your contracting business in Canada, it's wise to consult with an experienced attorney who can advise you about the process and the benefits.

Handling a Fall on a Job Site

Picture this: You and your crew are replacing the shingles on a client?s pavilion roof. Suddenly, one of your crew members loses his balance and goes sliding off the side. He?s fallen and laying injured on the ground below. Or you're working on tearing down gutters and one of your crew members slips and falls from the ladder. Do you know the proper first aid for when someone falls from a great height so that they have the best chances of survival until paramedics arrive?

Assess the Situation

The first thing to do when a crew member or subcontractor falls is to stop and assess the situation. Get close enough to the injured person to really take a good look. Some things, like severely broken bones, deep or large wounds that could cause heavy bleeding and seizures are immediately apparent even if you have no first aid or medical training. Don't try to move the person. However, serious injuries that aren?t readily visible can also occur with a severe fall.

Look for signs of consciousness and check to make sure the fall victim is breathing. If they aren?t, it's time to administer CPR (cardiopulmonary resuscitation). CPR is a first aid measure designed to keep a person alive long enough for the paramedics to arrive and take over, so be sure to give them a call. CPR keeps oxygenated blood flowing through a person?s system ? essential to avoiding death or brain damage.

CPR After a Fall

If you aren?t trained in CPR, the American Heart Association recommends that you only perform chest compressions. If there are any visibly broken bones in the fall victim?s chest, do not attempt to perform chest compressions unless advised by an emergency number dispatcher. If, for example, a person has an obviously broken rib, you could easily puncture a lung with it. But if all looks good and you need to get your crew member breathing again, CPR is the way to go.

Place one hand flat on your fellow contractor?s chest equidistant between the nipples. Place your other hand on top of the first hand, lock your elbows and line your shoulders up over your arms. Using your whole body weight, press down to a depth of two inches. Keep pressing about 100 times per minute (roughly the same as the number of beats in the BeeGee?s disco classic ?Stayin? Alive?.) Keep doing this until help arrives.

If you're trained in CPR, perform rescue breathing in conjunction with chest compressions.

First Aid for Bleeding

When you're falling from a great height, your first instinct isn?t usually to protect yourself from debris on the ground. If the fall victim is bleeding profusely, staunching the blood flow should be a priority.

Find a clean cloth and press it to the wound, applying pressure until either the bleeding stops or paramedics arrive. Do not try to remove debris from the wound, even if it looks severe. Do not move the person and do not try to apply a tourniquet unless you are trained in first aid techniques.

Dealing with a Concussion

Injuries from a fall aren?t always severe enough to warrant calling the paramedics, but they can be bad enough to still require medical care. If a person that falls is seemingly okay, conscious, breathing and not bleeding or suffering from broken bones, there's still a chance that they?ve suffered a concussion.

A concussion happens when your brain bounces against the cranium, causing bleeding, bruising and inflammation. Even if your coworker is okay, he or she should still be seen by a doctor to rule out a concussion.

Signs of a concussion include abnormally dilated pupils, dizziness, unconsciousness (for any period of time), loss of balance, light-headedness, distorted vision, blurry eyesight, irritability and an inability to focus or concentrate.

Anyone who falls is at risk for a concussion, even if they didn?t hit their head hard. Send your worker home for the day to see a doctor and re-evaluate their ability to work after hearing what the doctor has to say. A concussion can cause long-term damage and it can take weeks to months to heal from one.

Job Site Falls: Best Practices

Even if a person seems miraculously spared from the injuries associated with falls from great heights, they can still be injured. Only a doctor can make that determination, so it's best for everyone if you send your crew member or subcontractor for a medical check. Not only can a person?s injuries become apparent hours later, but working with someone who is concussed or otherwise injured puts everyone else on the job site at risk of further injury and accidents.

No job is worth dying for, so prevent falls by eliminating fall hazards as much as possible and administering proper first aid when they occur.

Recovering from a Bad Day on the Job: Self-Care for Contractors

Bad days happen. Some are worse than others, especially if they involve accidents or the loss of someone on your crew. Even those days when a lot of little things just seem to go wrong can weigh on you, however. Regardless of whether you're trying to work through a tragedy on the job site or you're just starting to feel the stress, there comes a point when you need to find a way to take care of yourself.

Develop a Hobby

You might think that you Don't really have time for a hobby ? but having something to channel your passions into and get your mind off work is a valuable asset. Whether you pick up golf, start building models or make a shift into woodworking, developing a hobby could go a long way toward reducing your overall stress and taking the edge off those hard days at work.

Talk Things Through

Taking the time to talk about What's bothering you is a great way to work through your stress. This doesn?t mean that you have to start seeing a psychiatrist, though that?s certainly an option; instead, this is more referring to finding a trusted friend or partner that you can talk to about What's bugging you. Make sure that you find someone who?s going to keep your secrets to themself and who isn?t going to judge. An outside perspective may help you sort through things, and more importantly you may feel a weight lifted just by talking about those things you?d otherwise hold inside.

Have That Drink

Some people enjoy relaxing with a glass of fine wine, but you might be more of a beer person. Maybe you enjoy a nice glass of bourbon. You might even shun alcohol entirely and opt instead for coffee, tea or juice. Regardless of your favorite drink, sit down and indulge yourself as you try to relax. You can even enjoy a favorite snack at the same time. Just make sure that you Don't overdo it if you do find yourself alcohol-inclined.

Make Lists

When work is really starting to get to you, sit down and start making a few lists to plan out your days. This not only gives you checklists to work from to make sure that everything runs like it's supposed to, but also engages you mentally as you have to think about the various aspects of jobs and running the office in advance. Making lists could even help your business run more efficiently, while you use the process to sort through some of the stress you're bringing home from the job.

Reorganize

If you're bearing too much stress, consider reorganizing your business a bit to delegate some of your responsibilities. Hire an accountant to cover the books, make a trusted worker a foreman over part of the crew and trust others with some of the tasks that you currently keep all to yourself. You may need to do a little bit of training to make sure that everything is done correctly, but in the end, you'll free up some of your time and cut back on a lot of the stress that comes with being a contractor.

Step Away

If things get really bad, you might need to step back even further than just doing a bit of delegation. Some contractors reach a point where they have to put down the hammer entirely, putting trusted people in charge of the crews and relegating themselves to office positions instead. You might even need to add periodic days off or take a vacation once your business is at a point where things will keep running smoothly. It might seem unthinkable to step back and let someone else run things, but if stress is tearing you apart, then you need to do whatever it takes to get back in good form.

The Ins and Outs of Using a Personal Truck for Business

As a contractor, a truck is basically a must. You need a way to haul tools and equipment, and though you could do it with an Impala, a truck is infinitely more practical. However, maintaining several vehicles can be expensive, so you might be considering using just one vehicle for both business and personal use. The good news: there's nothing illegal about doing this. However, it can get tricky keeping the work expenses separate from the personal. But with some planning, it can be done.

Track Your Mileage

you'll need to keep track of your business miles. You can track personal miles as well, but for tax purposes, the business mileage is the most important. You can use a mileage log or there are apps you can use, such as Drivemode or MileIQ, to track how much you drive your truck for work. If you Don't want to use an app, you can write down the mileage before you leave for the job site and the mileage on the truck when you'return home at the end of the workday. But be careful, if you make personal trips throughout the day, you'll need to deduct those miles from the business miles. Therefore an app is a good idea because it makes sorting the trips easier.

Check Your Insurance

Commercial insurance is the ideal because it covers your vehicles in the event of accidents on the job site. If you Don't want to use commercial insurance for your personal truck and prefer to use your personal insurance, you can. But consider this:

? If you have an accident in your truck while on the job, your personal insurance might not pay for damages to you or another person?s property.

? If your truck is damaged on a job site, (something falls on it, it's struck by a piece of heavy equipment, etc.) your personal insurance may not cover the damage.

In other words, using your personal vehicle and your personal insurance while doing business has a decent amount of risk. Worth noting, in some cases, your truck might be cheaper to insure with commercial insurance than with personal. Check with your insurance agency to get some quotes.

Keep Maintenance Records

Keep track of your oil changes, tire purchases or rotations and other maintenance for your truck. Using it for both purposes could increase the frequency maintenance is needed. Since there is no real way to determine whether the maintenance was needed due to business or personal use (unless you get a flat from a nail on a job site or blow a tire hitting a pothole on your way to pick up your kid from little league), you'll want to keep a record of all the maintenance done on the vehicle.

Choose Your Deduction Method

When it's tax time, you'll have some decisions to make. When choosing which type of deduction to take on the truck, you have two options: the IRS Mileage Rate or Actual Cost.

IRS Mileage Rate: You claim the total business miles and multiply that number by the IRS mileage rate. So, if you look at your mileage log or mileage tracker app and determine you drove 24,000 miles for work, you would multiply 24,000 by the IRS mileage rate, which is currently 53.5 cents per mile. This would give you a deduction of $12,840.

Actual Cost: Add up all the expenses you incurred for the vehicle, including depreciation and multiply that amount by the percentage that you used the truck for business. For instance, let?s say you spent $4,000 in upkeep and you are claiming $2,000 in depreciation expense. Your total expenses would be $6,000. And let?s say you use your vehicle for business 50 percent of the time and the other time is personal use. Multiply $6,000 times 50 percent to get a deduction of $3,000.

Please note, you cannot use both methods, it must be one of the other.

Whether you use commercial insurance or decide to track mileage instead of upkeep, using your personal truck for business has its pros and cons. Keep these points in mind as a tool to help you make the best decision.

Beyond Drywall: Green Wallboard Options You Should Know About

Well over 100 years ago, gypsum drywall was invented ? and it's been used in the construction industry ever since. However, new innovations in sustainable and reusable materials are being rolled out on a consistent basis. This non-stop ecologically-friendly movement makes it easier than ever for general contractors to ?go green?. An increasing number of contractors are already familiar with the many alternatives to traditional construction materials. This means an increasing number of clients are enjoying the long-term savings that using green materials can provide.

Eco-friendly construction is at the top of the list in every area of design and build and continues to expand in residential and non-residential construction. No matter what you call it ? wallboard, sheetrock or drywall ? the number of eco-friendly alternatives is constantly growing.

EcoRock

This advanced green wallboard contains no gypsum, wastes no resources to produce and contains 85 percent industrial waste by-products. The recycled materials used in manufacturing EcoRock wallboard come from steel and cement manufacturing facilities. The procedure to recycle those materials into a recyclable construction product uses a low amount of energy because the curing and drying process is done naturally ? without the aid of chemicals or heat. A standard 4 by 8-foot sheet of EcoRock typically costs about $20.

The industrial materials are mixed with water until a paste is formed. That?s poured into pre-sized forms and allowed to harden. The finished product is mold- and insect-resistant and produces about 60-percent less dust than drywall during installation. EcoRock can be disposed of in landfills without harming the environment.

Durra Panels

Made of the waste by-products from rice straw and wheat, Durra Panels uses the natural polymer in the straw as a binding agent during processing. This agricultural waste is What's left after the grains go through a burning process that releases carbon emissions. The panels are formed by first heating and pressing the materials to form a core using the straw polymer.

Next, non-toxic, water-based PVA glue (the same as used in book binding) is used to securely wrap each core with lengths of recycled Kraft liner paper until a panel is formed. Durra Panels can be safely discarded in landfills, used as fertilizer mulch or recycled. They provide high thermal insulation and are naturally fire- and humidity-resistant. They are available in a wide range of widths, lengths and finishes. The plain panels take paint well and have a smoother surface than drywall. At $28 per meter, these panels are typically used on high-end construction jobs.

Homosote

Homasote, the brand name for an eco-friendly, cellulose-based fiberboard that?s been in production since 1909, is a well-known product in the industry. The acoustical panels are made of 98-percent recycled materials and are used in hundreds of applications besides wall coverings, including floors, ceilings and roofs. The manufacturing process conserves more than 750,000 trees annually and uses about 30 million pounds of solid waste that would otherwise end up in landfills. A 4 by 8-foot wall panel costs between $20 and $25.

Magnesium Oxide Board

While mineral magnesium has been being used in the building industry for centuries, magnesium oxide board was discovered more than 40 years ago during repairs to the Great Wall of China. This green wallboard is ideal for use in the same applications as drywall.

Unlike sheetrock, MgO isn?t a paper-faced wallboard, although the smooth-face grade is comparable. it's usually available in white, light gray or beige and includes several additional face textures, strengths, and densities. it's fire-, mold- and insect-resistant, waterproof and extremely durable. The cost of this material is the most comparable to drywall. Depending on your supplier and the number of 4 by 8-foot sheets you order, the cost varies between $3 to $10 or more per sheet.

There are many ways to go green in the construction industry and demand for using such materials is increasing. Staying informed about sustainable materials and applications can help you expand your expertise while benefiting the environment.