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A corporate investment account can help an incorporated business or holding company invest funds that are not required for immediate use.
Matthew Lawrence, QAFP®, Financial Advisor, helps business owners determine what should remain accessible and how longer-term corporate funds may be invested.
CORPORATE INVESTING FOR NIAGARA BUSINESS OWNERS. PROUDLY CANADIAN.
CORPORATE INVESTING FOR NIAGARA BUSINESS OWNERS. PROUDLY CANADIAN.
Surplus cash is not the same as spare cash.
Surplus cash is not the same as spare cash.
Business funds may be needed for payroll, taxes, equipment, expansion, unexpected expenses or the next opportunity.
Leaving every dollar in cash may limit its long-term potential. Investing too much, or taking more risk than the business can support, may leave capital unavailable when it is needed.
Corporate investment income can also affect tax and future planning decisions. The strategy needs to reflect the business around the account.
Separate operating needs from long-term capital.
Separate operating needs from long-term capital.
A corporate investment strategy begins by identifying which funds may be needed for operations, taxes and planned expenditures.
The remaining capital can then be invested according to its purpose, time horizon and required level of access.
The objective is not to invest every available dollar. It is to give every dollar a clear job while preserving the flexibility the business needs.
Advice that considers the business behind the account.
Advice that considers the business behind the account.
Matthew works directly with you to understand where the funds came from, when they may be needed and what you want them to accomplish.
His QAFP® background provides a broader perspective on how corporate investments may connect with personal investments, retirement income, insurance and succession objectives.
Corporate tax and legal questions can be coordinated with your accountant or lawyer where specialist advice is required.
What does a corporate investment strategy consider?
What does a corporate investment strategy consider?
Operating Cash and Reserves
Operating Cash and Reserves
What the business needs to meet regular obligations and manage unexpected expenses.
Planned Expenditures
Planned Expenditures
Capital that may be required for taxes, equipment, expansion, acquisitions or other upcoming priorities.
Time Horizon and Access
Time Horizon and Access
When invested funds may be needed and how quickly they should be available.
Risk and Investment Mix
Risk and Investment Mix
How growth, income, stability and diversification may be balanced within the corporate account.
Corporate Tax Considerations
Corporate Tax Considerations
How investment income and the composition of corporate assets may affect broader tax planning.
Personal and Succession Objectives
Personal and Succession Objectives
How corporate investments may connect with retirement, shareholder income, business succession or an eventual sale.
The result is a clearer separation between money the business may need soon and capital that can be invested for longer-term objectives.
Frequently Asked Questions
Frequently Asked Questions
Can an operating company or holding company open an investment account?
Can an operating company or holding company open an investment account?
An incorporated business or holding company may be able to open an investment account, subject to the required corporate documents, authorized individuals and dealer requirements.
How much corporate cash should remain liquid?
How much corporate cash should remain liquid?
There is no universal amount. The appropriate reserve depends on regular expenses, taxes, debt obligations, planned purchases, the stability of cash flow and the possibility of unexpected needs.
Should corporate and personal investments use the same strategy?
Should corporate and personal investments use the same strategy?
Not necessarily. Corporate and personal accounts have different ownership, tax treatment, time horizons and liquidity requirements. They can be considered together while remaining legally and financially separate.
Can corporate investments affect tax planning or a future business sale?
Can corporate investments affect tax planning or a future business sale?
Yes. Passive investment income and the composition of corporate assets can affect certain tax outcomes. Significant decisions should be reviewed with the corporation’s accountant and, where appropriate, its lawyer.
Start with what the business needs.
Start with what the business needs.
You do not need to decide how much should be invested before beginning.
Complete the short form and tell Matthew what your business does, what funds you are considering and what you want that capital to accomplish. He will follow up personally to discuss the next step.
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