Sage 50 Canada

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Changing a sole proprietor to incorporated company

Posted By Dawn C over 9 years ago

I have a client that is a sole proprietor and is changing to be incorporated. There bank manager is telling them they do not need to start a new bank account but I don't know how to get a clean break if he doesn't. He has receivables and payable should i move them to the new company with opening balances or should the old company pay the bills and collect the receivables. I have done the final HST, Source Deductions and WSIB and really don't want to do more i want everything in the new company its just this not opening a new bank account has me baffled. Has anyone ever done that?

Dawn C

0 Agate over 9 years ago

Dawn C

I would really have your client discuss this with an accounting professional because there are ramifications with the change to incorporation. Section 85 of the ITA for one. One question comes to mind. Are the proceeds of the proprietor's business bank account going to be transferred to the corporation in entirety and when? What assets, liabilities, etc. if any are going to be transferred?

A new company setup with opening balances etc. would be the norm.

Hope this helps!
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Changing a sole proprietor to incorporated company

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