Qualifying Companies and Loss Attributing Qualifying Companies
Options for the small business owner.
What is the difference between Qualifying Companies and Loss Attributing Qualifying Companies and what are their advantages?
A Qualifying Company is a limited liability company that has elected to pay tax (if any) on its capital gains and net profits at the current company tax rate of 30% before paying tax-free dividends to it’s shareholders.
A Loss Attributing Qualifying Company is a Qualifying Company that has elected to pass its operating losses on to its shareholders so that they can offset the losses against their own income in order to pay less personal tax overall.
This is very common for companies which own rental properties to elect to be a Loss Attributing Qualifying Company, because rental properties often operate at a loss.
A Loss Attributing Qualifying Company is also a Qualifying Company; however a Qualifying Company is not automatically a Loss Attributing Qualifying Company.
Most companies elect to become a Loss Attributing Qualifying Company because it encompasses all potential tax advantages, regardless of whether the company makes a profit or a loss.
How does a business become a Qualifying Co
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