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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 09-19-2012, 11:53 AM
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Default Business type - income & support payments

Days before we broke up i was working on a project that i intended to launch had most of the stuff figured out but then shit hit the fan and .... ,anyways now i want to get back on track, but since now support payments are in the picture i need some help figuring the below out.

There are going to be two companies
1- technology services
2- Endowment fund

1- Technology services: The idea is to provide some technology services, out of the profits ~70% will go to an endowment fund (separate entity) for charitable organizations, ~30% will be income for me.

the users will outright know that its a for profit business, but they will also be informed the majority of profits from the business are forwarded to an endowment fund company for charitable organizations

now what i am left wondering is how do i register this *business* so that the 70% given away is not added to my annual income

2- Endowment fund: from the 100% of fund the endowment board will purchase franchises (any business, subway, tims, aldo etc), and 100% of the income from the franchises will go to support charitable organizations.

how do i setup this *fund company* in order to have 0% of this into my annual income since I will be receiving no money at all.

Important: i never want to hand her over any of the financial documents of any of these *businesses*

the ex was fully aware of my plans and i had exchanged some emails with her regarding the technology patent i was looking for. i am sure as soon as i register the businesses the witch hunt to increase support will start.
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Old 09-19-2012, 12:32 PM
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As a receiver of SS who was married to someone in business - I"d be all over your documentation like a bee to honey. You could package it up anyway you want to but if I was married to you for a time I would know that you aren't the sort of individual to go into business just to be a philanthropist.

My ex can start any businesses he wants but if I learn about them he has to provide ALL income and expense figures - that is written in our divorce judgment.

From what you describe above your "charitable" fund is no different than an RRSP for tax purposes. Before tax income is of great interest to someone receiving support. How you manage the fund, or what you do with the rest of it (give it away) is of little interest unless you're crying poverty. Its all one and the same - hiding income.

Technology patents are very, very expensive. That, in itself, would trigger my interest.
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Old 09-19-2012, 12:43 PM
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This is true.
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Old 09-19-2012, 03:44 PM
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Where's the "Like" button????
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Old 09-19-2012, 03:49 PM
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Quote:
Originally Posted by arabian View Post
As a receiver of SS who was married to someone in business - I"d be all over your documentation like a bee to honey.
^ the apropriate term is "leach". honey bees are sacred creatures who collect, rework their collection and provide their earning for the greater good of rest of the beings. leaches at the other hand are a perfect example of spousal support collectors who unjustifiably benefit from the victim due to the sheer fact that the victim cannot get rid of it.
Quote:
You could package it up anyway you want to but if I was married to you for a time I would know that you aren't the sort of individual to go into business just to be a philanthropist.
since you were not married to me *thankfully*, your comment is inappropriate and contrary to the facts. however given your comments i am happy to see that the other guy got rid of you. at the other had i feel sad for him that he even ever met you.

It is rare that i ever chose to put some one on my ignore list, but congratulations you have met the requirements given your absolutely rubbish posts in several threads and demeaning comments on several of my posts with out knowing the facts or any other just cause.
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Old 09-19-2012, 03:55 PM
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Truth huts eh? Scheming and lying to avert income will always come back and bite you in the arse in the end. This is why we have processes and laws set up - for people who lie and cheat.

I guess I rained on this guys little plan to defraud his ex. Boo hoo, boo hoo.

Yes he should be very thankful that I'm not his ex as I'm sure he has falsified documents not only to the courts but to CRA. I'd ensure he was audited for the next 3 years.

Its really very simple. Play by the rules. If you cheat you will be caught.
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Old 09-19-2012, 04:02 PM
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now for the rest of the people who would be interested to know how its done, I actually took a break from work and went to meet a corporate CA to figure this out. here is how its done

1- Incorporate a holdings company with sole proprietorship to yourself
2- Incorporate a technology company with 100% shares to the ownership holdings company

commence work under the technology company, (any patents should also be held under the tech company ideally)
if you earn revenues the technology company can pay you a salary which you will declare for tax and leaching purposes, forward the rest of the funds to the holding company, thats not income since its corporate transfer.

As long as the holdings company does not utilize the funds, they are tax free, if they are taken out by the owner they are taxable & leachable.

the holding company will buy frenchizes (taxable income) but since all that income will be given to registered charitable organizations i.e. united way, sick kids etc. it will be tax free
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Old 09-19-2012, 04:39 PM
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I do corporate law, and I understand the structure you are describing.

However, judges are also generally very intelligent. They are also provided a fair amount of discretion when it comes to making rulings.

I wouldn't be surprised if a judge deemed the income of the TechCo as income attributable to you, as you have ultimate control being the shareholder of the shareholder. Further, any income/revenue derived by the holdings company through investments etc. can also be attributable to the shareholder and any write-offs would have to be deemed appropriate.

I'm not saying your structure wouldn't work as a means of limiting tax. However, I don't believe a family law judge wouldn't look right through the structure and deem that it is an attempt to reduce/hide income and thus impute that persons income at a level in line with the revenues/profits of the corporations.
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Old 09-19-2012, 04:59 PM
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exactly ! How much money spent on lawyers and accountants is a dead give away.
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Old 09-19-2012, 05:23 PM
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Quote:
Originally Posted by HammerDad View Post
I do corporate law, and I understand the structure you are describing.

However, judges are also generally very intelligent. They are also provided a fair amount of discretion when it comes to making rulings.

I wouldn't be surprised if a judge deemed the income of the TechCo as income attributable to you, as you have ultimate control being the shareholder of the shareholder. Further, any income/revenue derived by the holdings company through investments etc. can also be attributable to the shareholder and any write-offs would have to be deemed appropriate.

I'm not saying your structure wouldn't work as a means of limiting tax. However, I don't believe a family law judge wouldn't look right through the structure and deem that it is an attempt to reduce/hide income and thus impute that persons income at a level in line with the revenues/profits of the corporations.
Now this is a very valued contribution, the CA wouldnt have known what the Judge would say.

So the real question is how do we drive to the income to the charities without it ending up biting me. once i am done paying the criminal lawyer I should be ok with paying whatever leaching amount i am currently paying plus the fair CS, and wont really need income from the TechCo.

for that reason I am more than willing to let some one else make a buck and simply volunteer my idea & time to charity. though some money would have helped given the current financial situation.

this is not to boast but to give a fair idea of my intents: since my school days i have been very active in charitable organizations, been on board of directors of several organizations and president of one, though i never even bothered looking into the accounting side of any, simply the function of charity.
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