# Am I considered a "Personal Services Business?"



## bmm07 (Nov 27, 2013)

Hello everyone, thank you for reading my post.

I have just secured a contract through an IT recruiting agency as a contractor/project manager in a bank. The terms of hiring are I have to be incorporated to be able to get the contract. I will also have a few other clients on the side as a source of income. I will work from home as well as in the office while servicing other clients on a day to day basis. 

My question is, will I be considered a "Personal Services Business?" 

Right now, I am the only person in my corporation and I am considering hiring my wife if this is possible.

Would appreciate some advice on this if possible. Thank you very much for your time.


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## Eclectic12 (Oct 20, 2010)

I'm not a tax expert but from a quick glance, it sounds like you should be concerned.

http://sbinfocanada.about.com/od/ta...oid-Being-A-Personal-Services-Corporation.htm


Cheers


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## wendi1 (Oct 2, 2013)

Also not a tax expert, but an incorporated one-person shop myself. Hiring your wife won't make a difference - the limit is 5 employees (good for income splitting, though - another topic).

It's hard to say what CRA will rule - as you can tell, the "guidelines" are pretty broad. But, the fact that you have other contracts, and pay for your own infrastructure (you do, don't you?), and have a professional existence outside the bank is in your favour.

Make sure you invoice the client. If you show up on an org chart or telephone list, make sure you are identified as a contractor. Pay for your own computer and cell phone. Set your own hours. Don't let the client tell you how to do your job, or when to come in. Have your own business card (not a bank business card). No birthday parties for you. Don't participate in corporate nonsense, like performance reviews. Don't supervise an employee.

If CRA targets you, hire an employment lawyer. This stuff is not set in stone, and a smart lawyer can save you lots of money.


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## Taraz (Nov 24, 2013)

Better yet, just outsource the work to India or China, then there will be no doubt that you're a corporation.  (www.freelancer.com)


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