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    This information only applies to Independent Consultants.

    If you’re an Independent Consultant – you have a separate GST- or HST-registered business, and you invoice Ian Martin regularly through your business.
    If you’re a Contract Employee (T4 or W-2) – please skip this article.


    Why do I need a business bank account?

    Besides credibility with customers and clients, having your business and personal accounts separate is imperative for record keeping.   If you’re an working through your GST- or HST-registered business, that incorporation is a separate, legal entity from you.  Your business will invoice us for your services, and pay the business – not you personally.

    One of the easiest ways to get unwanted attention from Canada Revenue Agency is to commingle business and personal expenses and bank accounts. If you were ever audited, you need to be able to show a clear trail of business revenue and expenses.

    As it’s your business, it’s a separate entity from you and so the personal assets of the owner(s) are sheltered from potential liability.

    As Small Business Info Canada points out:

    “… in certain cases (such as gross negligence by directors or owners of the company) the courts may disregard the “separate entity” concept of a corporation and hold the directors or shareholders of a company personally liable. This is known as “piercing the corporate veil”, and one of the criteria which may be used to determine this is the degree of separation between the financial activities of the owner(s) and of the business.

    As such a separate business bank account for an incorporated company is a must.”

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