Contract flying and the rules?
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Contract flying and the rules?
Hello!
I have the opportunity to fly part time for a company on their twin turboprop.
Should I start my own sole proprietorship business, and work as a contractor, and just bill the company for my services?
I know there are a lot of tax benefits to this.
My biggest question though is If I do this, and I have an at fault accident, who is liable?
Would this bankrupt me because I am contractor under a sole proprietorship? Do I need business insurance in this case? Any good insurance companies?
Thanks!
I have the opportunity to fly part time for a company on their twin turboprop.
Should I start my own sole proprietorship business, and work as a contractor, and just bill the company for my services?
I know there are a lot of tax benefits to this.
My biggest question though is If I do this, and I have an at fault accident, who is liable?
Would this bankrupt me because I am contractor under a sole proprietorship? Do I need business insurance in this case? Any good insurance companies?
Thanks!
Re: Contract flying and the rules?
I can't find the topic, but I've asked a similar question here once. The biggest point to remember is that your tax status (self employed) doesn't necessarily mean that you can't be considered an employee for liability reasons. If you do work the same schedule etc as a regular full time employee for a company, you'd probably have the same protection.
As an AvCanada discussion grows longer:
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
Re: Contract flying and the rules?
This means you want to incorporate and form a company. In the past it has been done but tax savings are because you pay yourself a smaller salary and put the rest into the corporation. This is not your personal money and you can recover some of it through dividends. You also need to set up a GST account and include GST in your billing and then submit it to the government. You would also be smart to by extended health insurance even if staying in canada and traveling inter provincially. To contract fly you don't need to incorporate but you must submit you earnings come tax time. Unless you are generating large bucks and better for the CRA is to be diversified. They frown on single vendor contracts. The hassle is not worth it to go the corporation route but contract outside of incorporating is simple if you don't mind tracking your money. Something like quickbooks would be handy.
Black air has no lift - extra fuel has no weight
http://www.blackair.ca
http://www.blackair.ca
Re: Contract flying and the rules?
Valleyboy, Dronepiper was asking about a sole proprietorship, not incorporating. Incorporating would likely be too expensive to make sense.
The short answer is that if you will be an employee of the company and they will be providing you with a T4, you don't need a proprietorship and you will not be able to write off business expenses. If they will hire you as a contractor and you invoice them you will need the proprietorship and will be able to write off some or most of the income, minimizing the taxes on that income.
As for liability, you'll want to get a lawyer's opinion on that and will probably want a contract with the company.
The short answer is that if you will be an employee of the company and they will be providing you with a T4, you don't need a proprietorship and you will not be able to write off business expenses. If they will hire you as a contractor and you invoice them you will need the proprietorship and will be able to write off some or most of the income, minimizing the taxes on that income.
As for liability, you'll want to get a lawyer's opinion on that and will probably want a contract with the company.
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Re: Contract flying and the rules?
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Last edited by TeePeeCreeper on Tue Mar 10, 2020 10:03 pm, edited 1 time in total.
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Re: Contract flying and the rules?
TeePeeCreeper wrote: ↑Tue Mar 10, 2020 9:40 pmI certainly wouldn't want to quote myself nor will I "digits" as only a person of self inflated sense would feel the need to do so or feel the need to proclaim such on their online signature line! PM me directly if you're feeling misunderstood.digits_ wrote: ↑Tue Mar 10, 2020 6:14 pm I can't find the topic, but I've asked a similar question here once. The biggest point to remember is that your tax status (self employed) doesn't necessarily mean that you can't be considered an employee for liability reasons. If you do work the same schedule etc as a regular full time employee for a company, you'd probably have the same protection.
To the OP;
"Only a fool would consider self representation". Comes to mind.
If you are thinking of going ahead with this the advice of a lawyer whom is well versed with your proposed venture/vision is likely to bear more fruit.
I wish you the best!
TPC
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- Rank (9)
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- Joined: Sun Dec 21, 2008 12:25 pm
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Re: Contract flying and the rules?
I certainly wouldn't want to quote myself nor will I "digits" as only a person of self inflated sense would feel the need to do so or feel the need to proclaim such on their online signature line! PM me directly if you're feeling misunderstood.digits_ wrote: ↑Tue Mar 10, 2020 6:14 pm I can't find the topic, but I've asked a similar question here once. The biggest point to remember is that your tax status (self employed) doesn't necessarily mean that you can't be considered an employee for liability reasons. If you do work the same schedule etc as a regular full time employee for a company, you'd probably have the same protection.
To the OP;
"Only a fool would consider self representation". Comes to mind.
If you are thinking of going ahead with this the advice of a lawyer whom is well versed with your proposed venture/vision is likely to bear more fruit for a fair price.
I wish you the best!
TPC
Re: Contract flying and the rules?
Found the topic mentioned above:digits_ wrote: ↑Tue Mar 10, 2020 6:14 pm I can't find the topic, but I've asked a similar question here once. The biggest point to remember is that your tax status (self employed) doesn't necessarily mean that you can't be considered an employee for liability reasons. If you do work the same schedule etc as a regular full time employee for a company, you'd probably have the same protection.
viewtopic.php?f=13&t=94608
The second part deals with the contract flying question.
As an AvCanada discussion grows longer:
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship