Hello experts. So I have been operating a business unincorporated and basically just under my name. I have now recently incorporated it and would like to take the money that is still unspent and move it into the new corporation bank account, but I don't want it to seem like new income. (Or does it matter?) Can I just move money into the corporation at any time be it from my own pocket or other income sources to be used? Or is there some special way to move money into the corporation?
It really depends under which legal jurisdiction you are. The tax laws are very different in each country.
Very generally speaking, every income needs to be accounted for, but what you could do is transfer the money to your corporate account and register it as a founder's loan to the company (which may or may not be paid back to you in the future). You just need to take into account that you still may need to report the source of the income (even if you didn't have a company then) and pay taxes for it (if applicable in your case - again, it depends where you located, how you're registered with the tax authorities, and what the amount is).
* Disclaimer: the above should not be seen as legal or tax advice as this is impossible to give without knowing all the details. You should always consult with an accountant or lawyer. I can try connect you with one if you let me know your location and budget.
I've successfully helped over 350 entrepreneurs, startups and businesses, and I would be happy to help you. After scheduling a call, please send me some background information so that I can prepare in advance - thus giving you maximum value for your money. Take a look at the great reviews I’ve received: https://clarity.fm/assafben-david
It is possible to move money any time you want, but these are pandemic times and your worry is justified.
The global recession this year will not be as deep as expected because of countries' efforts to counter the economic fallout from the coronavirus pandemic, the OECD said on Wednesday Sep 16 Sept 2020. But the recovery next year will also be more modest than anticipated, the Organisation for Economic Co-operation and Development said, projecting a contraction of 4.5 percent in global economic output this year and a return to growth of roughly 5.0 percent in 2021. In its previous set of forecasts in June, the Paris-based OECD had been expecting the global economy to shrink by 6.0 percent in 2020 and return to growth of 5.2 percent next year.
"After the initial bounce-back in many activities following the easing of confinement measures, there are some signs from high-frequency indicators and business surveys that the pace of the global recovery has lost momentum since June, particularly in many advanced economies," the OECD said. It pointed out, however, that "the economic outlook remains exceptionally uncertain, with the Covid-19 pandemic continuing to exert a substantial toll on economies and societies".
In the second quarter of 2020, global output more than 10 percent lower than at the end of 2019, "an unprecedented sudden shock in modern times", the OECD said.
The extent and timing of the pandemic shock differed across the major economies, but all experienced a sharp contraction in activity as necessary containment measures were implemented. Global trade collapsed, declining by over 15 percent in the first half of 2020, and labour markets were severely disrupted by reductions in working hours, job losses and the enforced shutdown of businesses.
Looking at individual economies, China was expected to be the only one to expand in 2020, with projected growth of 1.8 percent. India, on the other hand, would see its economy shrink by 10.2 percent. The United States, the world's biggest economy, would fare better than the global average, with a projected contraction of 3.8 percent this year. Germany would perform better than the eurozone, with its economy set to shrink by 5.4 percent, compared with a contraction of 7.9 percent for the single currency area. The French economy was set to shrink by 9.5 percent, Italy's by 10.5 percent and Britain's by 10.1 percent, the OECD predicted.
Overseas money transfers are possible through your bank as well, though you will often require a lot more information, including the name and address of the account holder, information about the financial institution the money is being sent to, and the SWIFT or IBAN of the recipient bank. International wire transfers sent in American dollars will cost you around $45. Funds sent in foreign currencies will cost about $35. Rates change and may vary depending upon your bank. There are several ways to transfer money:
1. Zelle: One of the newest players on the payment scene is Zelle, founded in 2017. The company is a United States-based digital payments network owned by the private financial services firm Early Warning Services. To access the service, users (with funds in a U.S. bank account) enroll their email and a U.S. mobile phone number with the Zelle app or through their bank's Zelle electronic portal. Next, the person sending the money enters the preferred mail address and U.S. mobile number of the recipient, who must also have a bank account in the United States. After payment is sent, the recipient receives a notification with instructions for completing the payment. Zelle does not charge fees to send or receive money, but sometimes the bank or other financial institution charges customers for providing access to the service.
2. PayPal: PayPal can be an economical method for transferring money. It allows individuals and businesses to transfer funds electronically from one PayPal account to another. It is free to send money through PayPal, though the recipient is charged a fee to cash the payment. For transfers up to $3,000, the charge is 2.9%, plus $0.30 per transaction. Fees decrease slightly for larger transactions, and there are no fees for sending to friends or family members, if money is coming from a bank account. International transaction fees tend to be about 1% higher and keep in mind that you will be charged an exchange rate on transfers made in international funds.
3. Western Union or MoneyGram: Western Union and MoneyGram provide similar services that allow you to transfer money to a different city, state, or country. They charge a flat rate for the transfer that is based on the speed of the transfer, the location you're sending money to, and the amount of money being sent. If you are doing an overseas or international transfer, you'll also be charged an exchange rate. These money transfer services don't generally offer a very competitive exchange rate, which results in a hidden charge if you transfer money internationally. However, one of the major benefits of these services is that they tend to be both highly dependable and convenient. As an example of fees, a $200 transfer through Western Union to a location within the United States or Canada will cost you around $12 for a rapid transfer and $8 for a next-day transfer. A transfer to the United Kingdom will cost around $22 if done through an agent of Western Union, and $15 if done online. Fees can change at any time.
4. Cash: Though this may be considered the "old-fashioned way" when it comes to transferring money, using cash can be extremely practical in some circumstances. For occasions where time is not the most important consideration, simply withdrawing cash and physically bringing it to another bank to deposit into an account is completely free! In most cases, the many cases the deposited money is available for withdrawal immediately. Keep in mind that sending cash through the mail is discouraged. If the mail gets lost, there is no way to retrieve the money.
5. Personal Checks: Writing a check and depositing it into another account, handing it to another individual, or sending it by mail to a recipient in a different city or state is another affordable choice—especially if your bank offers free checking. Things get a bit trickier when sending checks internationally. Sending a check overseas that's written in American dollars will often result in delays in cashing the check so that the bank can verify the deposit, and some banks may not even accept foreign checks. The recipient of the check may also have to pay a fee for cashing it and cover the exchange rate to have the funds exchanged into the local currency. This method is safer than cash for sending by mail because you can cancel a check if it does not arrive at its destination.
6. Bank Drafts, Money Orders, and Cashier's Checks: When it comes to physical transfers that are being sent in foreign currencies, you can purchase bank drafts and money orders in the currency of the location you're sending money to. Inexpensive money orders can be purchased through many post offices branches. These money orders will often be less expensive than those purchased through a financial institution, running anywhere between $3 and $9. Money orders purchased through a bank often cost about $10.
Money orders are typically used for smaller amounts than bank drafts. Because of this, the cost of purchasing a bank draft is often higher than for purchasing a money order. Though these forms of money transfer may take more time, they tend to be a more economical choice than services like wire transfers—and they are traceable in case they do not arrive at their destination.
7. Email Money Transfers: Some financial institutions, especially some of the larger Canadian banks, offer an email money transfer service. This form of money transfer functions like an electronic check. The funds are not physically transferred by email, though the transaction is initiated by email, and the recipient is notified by email that the funds are available. You do not need the recipient's bank account number, though a security question is generally required to identify the recipient before they can retrieve the funds. Transferring funds through email money transfer generally comes with a nominal cost of a couple of dollars, which makes it a cheap option if it is available to you. Receiving funds by this method is typically free. This service is also quite reliable and fast, generally only taking a few days to arrive in the recipient's account.
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