PRIVATE CORPORATIONS

Congratulations – you’ve worked hard to build a prosperous business. You’re also too busy being successful to find a suitable investment for your corporation’s passive investment capital.  

Your responsibilities include:

  • Managing and working in your company
  • Maximizing the passively invested money within your operating company and perhaps also within your holding company

You need to:

  • Keep the 2018 tax rules in mind to protect your Corporate Retained Earnings Limit
  • Have some funds for working capital, and some to be invested for the medium or long-term.
  • Ensure the guaranteed growth of your retained earningsYou have important work to do in your business, and you would like to have the guaranteed investment and security of GICs, along with the highest rates, without having to spend a considerable amount of your time shopping around for this solution.

We survey a broad spectrum of the Canadian GIC marketplace so you don’t have to.

Working with GICPlus give you:

  • Access to superior rates from a broad spectrum of Canadian financial institutions – typically higher than the big 5 banks
  • Efficient use of your time – we shop the GIC marketplace for you, manage the paperwork to multiple financial institutions, and assist with re-investment of funds at time of maturity.
  • Knowledge - that due diligence has been done to meet your company’s specific investment objective
  • A GIC investment plan - that meets your objectives for short-term liquidity needs and longer-term compound growth.

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Case Study - Corporate Cash Balances

Based in the GTA, this well-established company was successfully managing its operations and had regular free cashflow. For several years they were holding in excess of $500,000 in a low yielding cash account in the operating company as well as a significant cash balance in their holding company.

SCENARIO

Based in the GTA, this well-established company was successfully managing its operations and had regular Free Cashflow. For several years they were holding in excess of $500,000 in a low yielding cash account in the operating company as well as a significant cash balance in their holding company.
Access to the cash for liquidity or a growth opportunity was important, however, the partners were too busy being successful to find a suitable spot for this money.

SOLUTION

Our GICPlus advisor discussed the short and mid-term cash needs of the business to ascertain the appropriate level of immediate liquidity the company may require at any time in the future.

Under the new tax rules in the 2018 budget, they discussed how to protect the Corporate Retained Earnings Limit and best take advantage of corporately held investments.

A laddered portfolio of GICs was established.

Some short term notes were created that are immediately cashable should the need arise and medium term, compound GICs were established for enhanced returns.

The GICs were diversified amongst several banks to provide creditor protection

RESULT

The returns nearly tripled on the cash balances held by the operating company and the holding company by properly deploying the money in higher paying, guaranteed investments.

The GICPlus advisor helped to streamline the management of this important corporate asset by providing expert, ongoing service.

Click here to see the benefits of a laddered GIC portfolio.