Shareholder Loans and Salaries

A comprehensive guide to entering shareholder salaries, from adding details to ensuring indexation for inflation.

Introduction

The Corporations module in Conquest offers robust tools for managing shareholder loans. This feature enables the seamless integration of shareholder loans into the corporation's ownership structure, providing an accurate and dynamic way to track these financial contributions. Whether loans are being repaid or new contributions are made, the module ensures that the loan balance for each shareholder is updated in real-time, delivering clarity and precision in corporate financial planning.

Data Entry

Step 1:

• Navigate to the Corporations Overview page, where detailed corporation information is presented using interactive cards.
• Locate the Shareholder Loans card in the third row of the overview page.
  • This card provides a clear display of the outstanding shareholder loan balances, offering quick insights into the corporation's financial contributions.

Step 2:

• Click on the Shareholder Loans card to access detailed information.
• This will display the Balance as of Date and the Balance Owing, providing a clear snapshot of the current shareholder loan status.

Step 3:

• Balance as of Date: Enter the specific date for which the balance is being recorded.

  • Balance Owing: Input the total amount of shareholder loans owed by the corporation to each shareholder.

• Click the Shareholder Loan + button, located at the bottom-right of the screen, to add a new entry for Shareholder Loan Repayment or Shareholder Loan Contribution.

Reports

• Impacts on Personal Net Worth and Cash Flow:

  • The outstanding shareholder loan balance for clients and co-clients is reflected in their personal net worth reports. For instance, the personal Net Worth report displays the outstanding loan as an asset in the Corporations category.

• Personal Cash Flow Reporting:

  • Personal cash flow reports will show a cash outflow for shareholder loan contributions and a cash inflow for shareholder loan repayments.

• Impacts on Corporation Cash Flow:

  • The corporation will experience a cash outflow for shareholder loan repayments and a cash inflow for shareholder loan contributions.

• Impacts on Corporation Structure:

  • Outstanding shareholder loans are included in shareholder value, alongside preferred shares. Common share value decreases with any outstanding shareholder loan balance.
  • The Corporation Summary report now includes a detailed breakdown of shareholder value, covering shareholder loans, preferred shares, and common shares. This breakdown can be accessed in Reports – Corporations – Corporation Summary.

Shareholder Salaries

On the Corporations page, you’ll find a data card labeled Shareholder Salaries. This feature allows you to set up one or multiple salaries for the client or co-client, directly from the corporation. Payroll deductions are seamlessly integrated into the salary calculations, encompassing both the employee and employer portions of CPP/QPP contributions, ensuring accuracy and compliance.

Entering shareholder salaries

Step 1:

From the Corporations page, navigate to and open the Shareholder Salaries card.

Step 2:

From the Shareholder Salaries card, select + Add Shareholder Salary to begin.

Step 3:

Fill in the required fields, including:

• Description
• Shareholder
• Annual Income
• Frequency
• Start Date
• End Date
• Indexation for Inflation.

Reports for shareholder salaries

To access detailed information about any corporate salary, click the Reports icon located at the top of your screen.

Corporations Reports

The Corporations section offers several default reports to analyze shareholder salaries. You can also search for specific reports by adding a new tab. Key reports include:

• Corporation Projected Outflows
• Corporation Projected Activity
• Corporation Detailed Activity

Income Tax Reports

The Income Tax section provides valuable reports to review taxes withheld on shareholder salaries. Consider exploring the following reports:

• Income Withholding Tax
• Income Tax Details
• Cash Flow Summary

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