Canadian Money Forum banner

1 - 3 of 3 Posts

·
Registered
Joined
·
2 Posts
Discussion Starter · #1 ·
I'm starting to invest some of my company's funds (I'm an employee, not an owner) in the stock market, which I already do for myself. It's a small business, so it's not a huge sum either, and not having a finance department or investment account, they just transferred me some money to use in my account.

Here's my question: I'll be controlling my funds, and the company's funds, in a brokerage account under my name. As each person (me or my company), adds or removes money from the account, I need a way to keep track of who owns how much of the account total value.

MY solution to this problem was I'd just pretend the investment account is sort of like an ETF, and I'd break the account into "shares", and then issue new shares (or dissolve them) when either I or the company adds/removes money.

Is there an easier solution to this, or an easy way (software-wise) to implement my solution? I'd really avoid having two accounts, and since I know the owners and they're very flexible, any solution I can come up with is probably fine.

I'm also curious if there are any tax implications I'm missing by trading money for someone else under my name? I know it would mean that capital gains taxes would be assessed to myself rather than the company, so the tax rate might be different, but someone still pays anyhow. I can't immediately see problems with that, but I'm sure someone who knows this than me can tell me what they are.
 

·
Registered
Joined
·
20,512 Posts
This doesn't sound right to me. You're talking about inter-mingling your own money, and money belonging to someone else (the company), in the same account.

You can't do this with a friend's money, or a company's money. Corporate funds are supposed to be kept in a business account, as far as I know.

This can be done as a loan, if the company explicitly lends you money. There would also have to be documentation for this loan, and you would promise to repay it. In this arrangement, they lend you money, you do stuff with the money, and you have a debt to the company which you must repay.

But as a direct investing thing, I don't think it's appropriate for you to invest or manage company funds in your personal account. For example, what if you quit your job tomorrow? Would you just walk away with the money? How would the company get it back from you? Is there any documentation to prove the money belongs to them?

More importantly, this may be illegal. Generally, one needs to be licensed to manage other people's money.
 

·
Registered
Joined
·
2 Posts
Discussion Starter · #3 ·
This doesn't sound right to me. You're talking about inter-mingling your own money, and money belonging to someone else (the company), in the same account.

You can't do this with a friend's money, or a company's money. Corporate funds are supposed to be kept in a business account, as far as I know.

This can be done as a loan, if the company explicitly lends you money. There would also have to be documentation for this loan, and you would promise to repay it. In this arrangement, they lend you money, you do stuff with the money, and you have a debt to the company which you must repay.

But as a direct investing thing, I don't think it's appropriate for you to invest or manage company funds in your personal account. For example, what if you quit your job tomorrow? Would you just walk away with the money? How would the company get it back from you? Is there any documentation to prove the money belongs to them?

More importantly, this may be illegal. Generally, one needs to be licensed to manage other people's money.
I recently noticed the legal side myself, as the company is a limited company, and it looks like only a corporation can own shares, AND the highest personal tax rate is lower than the corporate investment income rate, so in essence I'd be sheltering the business from taxes by making the gains under my own name.

So in that case, is there any way to legally operate a single investment account on behalf of 3 private individuals, and at the end of the day have each of the 3 people pay the same taxes as if they had each made the same investment decisions themselves, with their fraction of monetary input?

I'm hoping this doesn't require all sorts of legal hoops, like becoming a fund manager or something.
 
1 - 3 of 3 Posts
Top