When it comes to maximizing the value of your property assets, establishing a real estate investment trust (REIT) is a great way to go. However, it’s important to know what to expect before you start.
A REIT is a corporation that owns and manages properties and distributes income to its shareholders. They’re similar to mutual funds, with advantages including enhanced buying power, diversification, liquidity and professional management.
A real estate investment trust (REIT) is a type of company that owns, leases and operates income-producing property. These properties can include offices, warehouses, retail stores and other types of commercial buildings. In return for investors’ money, the company pays rent to tenants and distributes its profits as dividends.
To set up a REIT in Canada, you’ll need to meet a few requirements. For instance, the REIT must be incorporated under Canadian law, and at least 75% of its assets must be invested in Canadian real estate. In addition, the REIT must have at least 100 shareholders who each own no more than 20% of outstanding shares.
The first thing you’ll need to do is to register your business with the Canadian government. This process is fairly simple and can be done online. You’ll also need to obtain a bank account and get licenses and permits from local authorities.
Another step is to draft a partnership agreement that covers all the important details of your REIT. This should be drafted in accordance with the Canadian Income Tax Act, and clearly define each party’s role.
When it comes to taxation, REITs are a great way to invest in Canadian commercial real estate without paying corporate income taxes themselves. This is because the REITs are able to pass their distributions through to unit holders without any tax liability.
However, if you hold REIT units outside of a registered account, such as a TFSA, you’ll need to pay capital gains tax on any profit you make from selling the units. This can be a significant problem, especially if you’re investing for your retirement.
A REIT is a great option for investing in the Canadian real estate market, but it’s important to understand all of the different kinds and their benefits before you decide to invest in one. The right type of REIT can help you to make the most of your investments while still providing excellent returns.
Torys has a team of professionals that can help you with all aspects of setting up a REIT. They offer experience in a wide range of areas, including real estate finance, mergers and acquisitions, and development. They can also assist with the incorporation process and other legal issues.
Business name registration
Whether you’re starting a sole proprietorship or a reit, your name is one of the most important aspects of your business. It should be attractive to customers, easy to remember and tell people what your business does. It should also be distinctive enough to distinguish your company from your competitors.
If you’re registering a business, you need to find out if the name you want is available and then register it with the government. This can be a tedious process, but it’s essential to ensure that you have the right name for your business.
To determine if your desired name is available, you can use the NUANS search service to compare it with the database of registered and applied-for trademarks. Some free online services are also available to search for names, and other commercial services can provide a more thorough report.
Keep in mind that a name that sounds similar to an existing name or trade mark might get rejected, so try to choose a name that’s distinctive and doesn’t sound too much like another name. It’s also a good idea to avoid names that are too similar to your own personal name or other identifying information.
Some Provinces require a name search before registering an unincorporated business name, so it’s important to make sure your proposed business name doesn’t sound too similar to an existing one. This could lead to confusion and potential legal claims, so it’s best to be safe than sorry.
The registration process for a reit in Canada is similar to that of a sole proprietorship or partnership, but it may be slightly different depending on the type of business structure you’ve chosen. For example, if you’re a corporation, you’ll need to register the business name with the Companies and Personal Property Security Branch of the Ministry of Government Services.
If you’re incorporating, you can apply to have your corporate or business name approved by the Canadian Intellectual Property Office (CIPO) as part of your application. CIPO will examine your proposed name and send you an email if it’s approved or rejected. It typically takes about 5 days to receive a response. If your name is rejected, you can choose a new one and start the process again.
If you want to set up a real estate investment trust in Canada, there are a few things that you need to do first. The first step is to get your company incorporated, which means you need to file articles of incorporation with the government of the province or territory in which you want to operate.
Next, you need to register the name of your company with the government. This can be done online or with a local lawyer. Then, you need to register your business with the Canadian Intellectual Property Office.
Having your company incorporated ensures that your business will be treated as a separate legal entity, which can help you protect yourself from any potential issues that may arise in the future. It also makes it easier to sell your business at a later date.
Once your business is incorporated, you need to open a bank account for the business. This will be used to keep the finances of your company separate from those of you personally, as well as to pay taxes on the income that your business earns.
You can also use this account to deposit funds that you have received from your business. This can be done on a regular basis, depending on how you are setting up your accounting system.
As with most businesses, you need to keep track of your REIT’s income and expenses. This can be tricky, but it’s important to do so if you want to avoid paying tax on your REIT’s distributions.
REITs are often a great way to invest in Canadian real estate, as they have a proven track record of growing and paying out high dividends. They are also a good investment choice for retirement savers as their returns are not taxed when earned, so they can be a great addition to your portfolio.
However, because REITs are taxable differently than other assets, you will need to keep track of their distributions throughout the year. Those distributions can come from many sources, including eligible dividends, capital gains, return of capital and foreign income, and each type of income will receive different tax treatment. That’s why it’s a good idea to keep your REIT investments in registered accounts, such as RRSPs or TFSAs.
Licensing and permits
Setting up a REIT in Canada is a relatively simple process. You simply need to register with the relevant authorities and meet certain requirements. In addition, you’ll need to open a bank account to hold your company’s funds. You should consult a lawyer or accountant before doing this because there are some legal issues you need to consider.
Real estate investment trusts are companies that own and operate income-producing property. They usually trade on stock exchanges, and they offer a number of benefits to investors.
To set up a REIT, you must first incorporate in Canada as a corporation. You can do this by filing Articles of Incorporation with the relevant provincial or territorial government. You should also register your business name and trademark your brand.
You should also obtain a Federal Tax Identification Number (FEIN) and apply for a business license from the relevant government. You should also file regular tax returns with the IRS and pay taxes on the income of your REIT.
While the REIT model is fairly straightforward, there are some unique challenges to be aware of. For example, REITs need to make sure that their tenants have the right licenses and are in good standing with the applicable regulators.
This is because if any of the tenants involved in your REIT are arrested, prosecuted or otherwise forced to close their business, you’ll have a difficult time finding a replacement tenant.
Another challenge is that cannabis businesses often struggle to obtain and maintain a wide variety of licenses. While these licenses may not be as complex as those of other industries, they are often tied to specific locations and can be hard to replace.
For this reason, many cannabis businesses are turning to REITs in order to gain greater flexibility. This can help them expand their dealership network or acquire new assets without having to pay out huge amounts of money in cash.
REITs are also useful for businesses that have a large portfolio of real estate. For example, Dilawri Group established Automotive Properties REIT in 2015, and Loblaw Companies Limited established Choice Properties REIT in 2012. These REITs have helped their business owners access additional capital and improve their bottom lines.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.