Corporate Bank Account Setups...Help!

[CaesarPua]

Hi REIN Community,

I have just set up my two tiered corporate structure...Parentco and Realco. I would like to setup the bank accounts now, but I need some help.

Assuming each of the properties are with different JV partners, it makes sense to have a separate bank account for each. However, for general real estate expenses like auto, REIN fees, education expenses, etc. should I be setting up a bank account for both ParentCo and RealCo or just RealCo? (i.e. Should the general account be owned by ParentCo or RealCo?)

I`ve sent the question off to my accountant George Dube, but I`ll be seeing my banker this evening and was hoping someone else on this forum might know...

Thanks,
Caesar

 

[chrisR]

QUOTE (CaesarPua @ Jan 25 2010, 07:54 AM) Hi REIN Community,

I have just set up my two tiered corporate structure...Parentco and Realco. I would like to setup the bank accounts now, but I need some help.

Assuming each of the properties are with different JV partners, it makes sense to have a separate bank account for each. However, for general real estate expenses like auto, REIN fees, education expenses, etc. should I be setting up a bank account for both ParentCo and RealCo or just RealCo? (i.e. Should the general account be owned by ParentCo or RealCo?)

I`ve sent the question off to my accountant George Dube, but I`ll be seeing my banker this evening and was hoping someone else on this forum might know...

Thanks,
Caesar


In the two tiered corporate structure the General expenses would go in the 3rd Active trading Co

chris

 

[CaesarPua]

QUOTE (chrisR @ Jan 25 2010, 02:11 PM) In the two tiered corporate structure the General expenses would go in the 3rd Active trading Co

chris


Sorry Chris, I`m a newbie when it comes to corporate structure banking/accounting. Can you elaborate in layman terms?

Thanks,
Caesar

 

[chrisR]

QUOTE (CaesarPua @ Jan 25 2010, 11:46 AM) Sorry Chris, I`m a newbie when it comes to corporate structure banking/accounting. Can you elaborate in layman terms?

Thanks,
Caesar

what you would do is to set up a third company 100% owned by the holding Co, this company would do all the property management and admin for the group of companies and could qualify for the Small Business Deduction (Lower rate Tax). this company would have no or little assets and would make all the `offers to purchase` contracts

this is a BIG subject and there are many books written on it or may be talk to your accountant. as RAIN says" if you don`t know why you need to incorporate it is probably best not to" remember 3 companies are 3 time more costly than one company!!

chris

 

[CaesarPua]

QUOTE (chrisR @ Jan 25 2010, 05:29 PM) what you would do is to set up a third company 100% owned by the holding Co, this company would do all the property management and admin for the group of companies and could qualify for the Small Business Deduction (Lower rate Tax). this company would have no or little assets and would make all the `offers to purchase` contracts

this is a BIG subject and there are many books written on it or may be talk to your accountant. as RAIN says" if you don`t know why you need to incorporate it is probably best not to" remember 3 companies are 3 time more costly than one company!!

chris

Thanks Chris. George Dube (our REIN expert accountant from Ontario) has explained the situation for me and now I`m onside.