Kutum & Associates

04/17/2015

09/08/2014

Top 10 Tips for Starting a Business That Will Succeed

1) Do what you love.
You're going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it's really important that you truly deeply enjoy what you do, whether it be running fishing charters, creating pottery or providing financial advice.
2) Start your business while you're still employed.
How long can most people live without money? Not long. And it may be a long time before your new business actually makes any profits. Being employed while you're starting a business means money in your pocket while you're going through the starting a business process.

3) Don't do it alone.
You need a support system while you're starting a business (and afterwards). A family member or friend that you can bounce ideas off and who will listen sympathetically to the latest business start up crisis is invaluable. Even better, find a mentor or, if you qualify, apply for a business start up program such as The Self-Employment Program. When you're starting a business experienced guidance is the best support system of all.

4) Get clients or customers first.
Don't wait until you've officially started your business to line these up, because your business can't survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can't start marketing too soon. (See Attracting New Business on a Shoestring Budget and The 7 Best Places to Find Clients for tips.)

5) Write a business plan.
The main reason for doing a business plan first when you're thinking of starting a business is that it can help you avoid sinking your time and money into starting a business that will not succeed. (See Why You Need a Business Plan for other good reasons.)
Remember, you don't have to work through a full scale business plan for each new business idea you come up with; my Quick-Start Business Plan, for instance, will let you test the potential of your business idea much more quickly.

6) Do the research.
You'll do a lot of research writing a business plan, but that's just a start. When you're starting a business, you need to become an expert on your industry, products and services if you're not already. Joining related industry or professional associations before you start your business is a great idea.

7) Get professional help.
On the other hand, just because you're starting a business, doesn't mean you have to be an expert on everything. If you're not an accountant or bookkeeper, hire one (or both).(These Tips for Finding a Good Accountant may be useful.) If you need to write up a contract, and you're not a lawyer, hire one. You will waste more time and possibly money in the long run trying to do things yourself that you are not qualified to do.

8) Get the money lined up.
Save up if you have to. Approach potential investors and lenders. Figure our your financial fall-back plan. Don't expect to start a business and then walk into a bank and get money. Traditional lenders don't like new ideas and don't like businesses without proven track records.

9) Be professional from the get-go.
Everything about you and the way you do business needs to let people know that you are a professional running a serious business. That means getting all the accoutrements such as professional business cards, a business phone and a business email address, and treating people in a professional, courteous manner.

10) Get the legal and tax issues right the first time.
It's much more difficult and expensive to unsnarl a mess afterwards. Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers' Compensation Insurance or deal with payroll taxes? How will the form of business you choose affect your income tax situation? Learn what your legal and tax responsibilities are before you start your business and operate accordingly.
Following the advice on starting a business above will make starting a business both a smoother, less stressful process and go a long way towards ensuring the business you start lasts and thrives.

08/07/2014

Download your free entrepreneur's guide to cash flow management and get more peace of mind by learning the 7 principles of smart cash flow management.

08/05/2014

CRA owes a duty of care to taxpayers
Bennett Jones LLP
Alison J. Gray
Canada

July 14 2014
Bennett Jones LLP logo

While taxpayers have initiated a number of civil claims against the CRA, alleging everything from negligence to fraud, these claims are rarely successful, as courts have traditionally been reluctant to ascribe any duty of care to the CRA. However, the British Columbia Supreme Court’s decision in Leroux v. Canada Revenue Agency, 2014 BCSC 720 signals a shift in judicial thinking and provides guidance to potential litigants seeking to hold the CRA accountable for negligent conduct.

The CRA issued reassessments to Leroux for GST and income tax totaling more than $600,000, after interest and penalties. Following an appeal to the Tax Court, some payments made by Leroux and a successful application for interest relief, Leroux received a refund of $25,000. However, Leroux did lose his business and home. He sued the CRA for misfeasance in public office, and in response, the CRA argued it owed no private law duty of care to an individual taxpayer.

Prior to the decision in Leroux, courts for the most part accepted CRA’s position and found it owed no private law duty of care to taxpayers. Absent a duty of care, taxpayers are prohibited from pursuing the CRA in negligence.

In Leroux, the Court rejected the CRA’s position and held the CRA did owe a duty of care to Leroux, and by extension, other taxpayers. The Court also held that the CRA breached the duty of care owed to Leroux in imposing gross negligence penalties. In doing so, the Court found the auditor used the wrong standard for imposing penalties and that the penalties were applied to the whole of the income, including that resulting from issues the CRA itself argued were difficult and complex. The CRA could not characterize the issues as difficult and complex and at the same time, characterize the contrary positions taken by Leroux on those issues as grossly negligent. The Court went on to find that the CRA’s conduct in characterizing Leroux’s position as grossly negligent and assessing huge penalties, apparently for the purpose of avoiding a limitation period, was “unacceptable and well outside the standard of care expected of honourable public servants or of reasonably competent tax auditors”. What was objectionable, in the Court’s opinion, was not that the CRA was wrong, or that the auditor made mistakes in fact and law, but that the CRA misused and misapplied the term “grossly negligent” and proceeded to assess penalties that were as much as 900%.

Ultimately, Leroux was not successful in his claim against the CRA because he could not prove that his losses were caused by the CRA’s negligent conduct. However, for Canadian taxpayers, Leroux is a winning decision, as it reinforces the CRA’s accountability in issuing assessments, auditing and imposing penalties. While it will rarely be the case that the CRA’s conduct is actionable, the Leroux decision provides an additional check on what can and cannot be done by employees of the CRA in the course of their duties. Hopefully, Leroux will be the first in a line of cases that will further and better define the scope of the CRA’s civil law duties to taxpayers.

08/03/2014

Management Styles



Kutum & Associates is a management consulting firm lead by Dr. Imad Kutum, with a wealth of over 20 years on management experience, can guide you and help you better manage your organization.
Managers have to perform many roles in an organization and how they handle various situations will depend on their style of management. A management style is an overall method of leadership used by a manager. There are two sharply contrasting styles that will be broken down into smaller subsets later:

-o Autocratic
-o Permissive

Each style has its own characteristics:
Autocratic: Leader makes all decisions unilaterally.
Permissive: Leader permits subordinates to take part in decision making and also gives them a considerable degree of autonomy in completing routine work activities.
Combining these categories with democratic (subordinates are allowed to participate in decision making) and directive (subordinates are told exactly how to do their jobs) styles give us four distinct ways to manage:
Directive Democrat: Makes decisions participatively; closely supervises subordinates.
Directive Autocrat: Makes decisions unilaterally; closely supervises subordinates.
Permissive Democrat: Makes decisions participatively; gives subordinates latitude in carrying out their work.
Permissive Autocrat: Makes decisions unilaterally; gives subordinates latitude in carrying out their work.
In what situations would each style be appropriate? Inappropriate?
Managers must also adjust their styles according to the situation that they are presented with. Below are four quadrants of situational leadership that depend on the amount of support and guidance needed:
Telling: Works best when employees are neither willing nor able to do the job (high need of support and high need of guidance).
Delegating: Works best when the employees are willing to do the job and know how to go about it (low need of support and low need of guidance).
Participating: Works best when employees have the ability to do the job, but need a high amount of support (low need of guidance but high need of support).
Selling: Works best when employees are willing to do the job, but don’t know how to do it (low need of support but high need of guidance).
The different styles depend on the situation and the relationship behavior (amount of support required) and task behavior (amount of guidance required).
For Further information or any questions please contact Dr. Imad Kutum

08/03/2014

What is dissolution?



Dissolution is the legal termination of a corporation. In other words, dissolution is the act of ending the existence of a corporation. A corporation is dissolved when a Certificate of Dissolution is issued by Corporations Canada. The effective date is shown on the Certificate of Dissolution.
When can a corporation apply for dissolution?
A corporation can apply to dissolve when it has no property or liabilities. The exception is a bankrupt corporation. Bankruptcy does not end a corporation's existence. A bankrupt corporation cannot request to be dissolved under the CBCA.
Contact Dr. Imad Kutum if you have a corporation that you need to dissolve it

03/14/2014

Disability Tax Credit

The Government of Canada gives the Disability Tax Credit (DTC) to tax payers who have a disability or are the sole provider of someone with a disability. Applying for the disability tax credit can be confusing, technical and frustrating. Our job is to simplify the process. We are familiar with the system and the method of how to file successfully for the DTC.

We will provide you will all necessary forms and clear instructions for how to submit a complete claim. Once you have sent us whatever information we have requested, the rest is in our hands. We will review and submit the claim to the CRA for approval and
then you will receive your money.

We will help disabled people qualify for the Registered Disability Savings Plan, Disability Tax Credit, and other Disability Tax benefits for their disabilities.

03/13/2014

Our nice weather in Canada!!!!

03/10/2014

Why Should I Incorporate?

If you decide to incorporate, you will then have to choose between federal and provincial/territorial incorporation. If you are not ready to incorporate at this time, remember that the factors affecting this decision can change over time. You may find it helpful to keep this guide on hand for future reference.

One of the most frequently asked questions by entrepreneurs starting a new business is: "Should I incorporate?" The answer to this question is usually: "That depends on your particular situation and your particular needs."

1.1 Benefits of Incorporating
Separate legal entity
The act of incorporating creates a new legal entity called a corporation, commonly referred to as a “company.” A corporation has the same rights and obligations under Canadian law as a natural person. Among other things, this means it can acquire assets, go into debt, enter into contracts, sue or be sued, and even be found guilty of committing a crime. A corporation's money and other assets belong to the corporation and not to its shareholders.

When a business is incorporated, its separate legal status, property, rights and liabilities continue to exist until the corporation is dissolved, even if one or more shareholders or directors sell their shares, die or leave the corporation.

Limited liability
Incorporation limits the liability of a corporation's shareholders. This means that, as a general rule, the shareholders of a corporation are not responsible for its debts. If the corporation goes bankrupt, a shareholder will not lose more than his or her investment (unless the shareholder has provided personal guarantees for the corporation's debts). Creditors also cannot sue shareholders for liabilities (debts) incurred by the corporation, even though shareholders are owners of the corporation. Note, however, that if a shareholder has another relationship with the corporation — for example, as a director — then he or she may, in certain circumstances, be liable for the debts of the corporation.

The Canada Business Corporations Act (CBCA) places a number of obligations and responsibilities on directors. For example, it says that directors can be held liable for certain acts or failures to act.

Lower corporate tax rates
Because corporations are taxed separately from their owners, and the corporate tax rate is generally lower than the individual tax rate, incorporation may offer you some fiscal advantages. We strongly suggest that you ask a lawyer or accountant to help you assess whether incorporating might save you money.

03/09/2014

Start-Up

Follow your Dreams!
•Be your own boss
•Control your financial future
•Do what you love to do

We’re here to help you with:Business planning

Every business starts with thorough research and planning. We assist as you embark on this important first step. We’ll connect you to information, provide you with contacts and guide you through the processes to help you achieve your business dreams.