CanadaOne Twitter CanadaOne Linkedin CanadaOne Facebook CanadaONe RSS

Ask The Expert

Can a loan be paid back

By Gord Ahier |

Paul asked:

Can I pay back a loan for buying a business from business earned capital. Are there any income tax implications. This is a hairdressing salon in Kelowna, B.C.

Gord Ahier answered:

The question will revolve around whether the business is incorporated or not. If you bought shares of a company that operates a hair salon business, you will need to withdraw funds from the company so that you can pay the purchaser. This will normally give rise to personal income tax on the funds withdrawn. On the other hand, if you are operating a sole proprietorship, than the payment to the vendor by the proprietorship does not give rise to personal income tax in your hands.

We would suggest you contact your accountant to discuss your question and equally important to decided if paying down personal debt would be better for you.

Click here to go back to Ask-an-Expert index page.

Canadian, Eh!

For over 15 years CanadaOne has helped Canadian businesses start-up and grow. All of the content on our site is created to help busineses get Canadian answers!

Featured Member

MemberZone. Get in the zone! Join Today!

CanadaOne Recommends

Bullies in the Boardroom: Covering the Legal Bases

Should I Start My Own Company?

Conversations with Entrepreneurs: Billy Blanks

Avoiding Legal Perils: Critical Insights into Canadian Franchise Law

Starting a Business: Choosing a Year-End

More