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Congratulations on your decision to become a part of this incredible industry. Now you have to ask yourself what type of Ownership best suits my needs? Your choice will determine the amount of risk, tax considerations, the number of participants involved and other circumstances which are unique to our industry.
Let’s give you a breakdown of the different options:
Sole Proprietorship will allow an individual to carry on a business in his or her own name without having to complete any legal documents or other formalities. This individual, as the sole owner of the business, has the right and responsibility to make all decisions concerning the business. If you wish to carry on business under a name other than your own (a trade name), there are registration requirements.
Since the Sole Proprietor does not have a separate legal identity, all income, capital gains, or losses are attributed to the owner and taxed in the owner’s hands. This is useful for the first few years when your business usually incurs losses which can be offset again other personal income (Section 31 of the Income Tax Act).
Once your business starts to earn profit, you may wish to incorporate to takes advantage of tax deferrals. This would be the best time to speak with your accountant.
Disadvantage to Sole Proprietorship is the lack of separate legal identity. You are personally liable for any losses incurred by the business and all personal asset’s are at risk in the event of business failure. You would also be liable for actions of any employees of the business during their employment.
We recommend getting appropriate insurance coverage for protection.
When two or more people carry on a business together with a view to make a profit, they have formed a partnership. Each partner has personal involvement, control and is entitled to share in profits and losses.
Partnerships are governed by provincial legislation. Its recommended that names and addresses of the partners, along with the partnership name (Business) be registered with the appropriate government agency.
Partners are recommended to draw up agreements between themselves to deal with management of partnership, distribution of profits, liabilities, and anything that’s important.
Co-Ownership consists of two or more individuals who purchase a horse together. It’s always recommended co-ownership agreements are created to identify the interests of each owner and their obligations.
For tax purposes, each co-owner is treated like a sole proprietor. Each person’s share is taxed at his or her own rate.
Anyone can be a co-owner including an individual, a partnership, a trust or a corporation.
One or more individuals can incorporate a company to carry on business. A company has its own legal personality distinct from its owners; as such, it can sue or be sued in its own name, enter into contracts, own property and remain intact through the deaths of its owners or the transfer of business to new owners.
Unlike sole proprietorship and partnerships, a company does not exist until its properly registered with the government.
Syndicates are becoming a popular way for individuals or investors, who couldn’t afford to purchase a race horse, become new owners. They allow interested parties to purchase a percentage of a horse, whether yearling or currently racing.
Investors come together to purchase a race horse, stallion, or horse operation, with a view to making a profit like a business.
In most syndication’s, the role of the investors is relatively passive. There is usually one managing partner or experienced horse person who takes the role of management and control of the horse operations.
Often, there is some tax advantage to participation in a syndicate.
Become A Thoroughbred Racehorse Owner Today. Ownership Specialist Stacie Roberts is here to provide you with the best guidance to becoming a Thoroughbred racehorse owner. From choosing the type of ownership you would like to experience to ensuring that you have a trainer, partnership or group that will fit your expectations. Visit ownathoroughbred.ca or contact Ownership Specialist, Stacie Roberts today at 416-230-5190 or email ownathoroughbred@gmail.com.
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Email: horse@jump.ca
Phone: 604-544-9955
Purchasing a yearling can be one of the least expensive ways of acquiring a thoroughbred. You are purchasing purely on pedigree and conformation. Since yearlings are completely untried, once it matures, it may be disinclined to race or become the next Northern Dancer.
“Select” yearling sales are the pick of the crop and prices go accordingly. At the “non-select” sales there are thoroughbreds of every kind and price range. Yearlings can be anywhere from 10 to 18 months of age; therefore you they may have up to a year of care and schooling before they can be entered into their first race.
Generally held early in the years. Horses have been ridden and have experienced some training, galloping or breezing. These horses are close to starting their first race.
Since their soundness and fitness have to be demonstrated and since their owners have invested more time in keeping and schooling them, these two-year-old’s are usually more expensive than yearlings.
Buying a horse from a claiming race is one of the quickest ways to become a racehorse owner. Claiming races constitute approximately three-quarters of all races run.
Claiming works like this. If you want to run a horse at the bottom of the claiming ladder (example $4,000) you must be willing to lose the horse for that price. In the minutes before the race is run, anyone can put up $4,000 to claim your horse. If the horse wins, you get the purse money, but the horse now belongs to the owner who put in the claim.
A claim must be entered 15 minutes prior to post time and the money for the claim must be in the owner’s account at the track. The claim slip must be filled out, put in a sealed envelope; time stamped and put in the claim box by the clerk of scales. Your Trainer will assist you with this process.
Private purchase of a thoroughbred can be done on and off the track. Owners can purchase a horse privately from the breeding farm, farm owners or training barns (Race track backstretch) Owners and/or Trainer’s can receive tips on specific horses for purchase or they can have special relationships with the farms themselves which leads to the acquisition.
As always there are upsides and downsides to these types of purchases. An upside is you, your trainer and vet can take all the time you need to consider and examine potential horses; plus you can research the bloodlines. The downside, the Owner will have a set price.
We recommend that any horses purchased in Private have a formal Bill of Sale before completing the transaction. This is not only for the Owners protection, but for the sell as well.
Syndicates are always available for new or current owners. When choosing a syndicate make sure you to choose the right one for your needs. You can choose to join an existing syndicate or create a new one with friends and/or family. The amount of money you are willing to invest along with the amount of owners will determine your percentage of the horse.
There is less risk associated with syndicates since owners are only investing to purchase a portion of a thoroughbred horse instead of buying the horse out right.
Purchasing a yearling can be one of the least expensive ways of acquiring a thoroughbred. You are purchasing purely on pedigree and conformation. Since yearlings are completely untried, once it matures, it may be disinclined to race or become the next Northern Dancer.
“Select” yearling sales are the pick of the crop and prices go accordingly. At the “non-select” sales there are thoroughbreds of every kind and price range. Yearlings can be anywhere from 10 to 18 months of age; therefore you they may have up to a year of care and schooling before they can be entered into their first race.
Generally held early in the years. Horses have been ridden and have experienced some training, galloping or breezing. These horses are close to starting their first race.
Since their soundness and fitness have to be demonstrated and since their owners have invested more time in keeping and schooling them, these two-year-old’s are usually more expensive than yearlings.
Buying a horse from a claiming race is one of the quickest ways to become a racehorse owner. Claiming races constitute approximately three-quarters of all races run.
Claiming works like this. If you want to run a horse at the bottom of the claiming ladder (example $4,000) you must be willing to lose the horse for that price. In the minutes before the race is run, anyone can put up $4,000 to claim your horse. If the horse wins, you get the purse money, but the horse now belongs to the owner who put in the claim.
A claim must be entered 15 minutes prior to post time and the money for the claim must be in the owner’s account at the track. The claim slip must be filled out, put in a sealed envelope; time stamped and put in the claim box by the clerk of scales. Your Trainer will assist you with this process.
Private purchase of a thoroughbred can be done on and off the track. Owners can purchase a horse privately from the breeding farm, farm owners or training barns (Race track backstretch) Owners and/or Trainer’s can receive tips on specific horses for purchase or they can have special relationships with the farms themselves which leads to the acquisition.
As always there are upsides and downsides to these types of purchases. An upside is you, your trainer and vet can take all the time you need to consider and examine potential horses; plus you can research the bloodlines. The downside, the Owner will have a set price.
We recommend that any horses purchased in Private have a formal Bill of Sale before completing the transaction. This is not only for the Owners protection, but for the sell as well.
Syndicates are always available for new or current owners. When choosing a syndicate make sure you to choose the right one for your needs. You can choose to join an existing syndicate or create a new one with friends and/or family. The amount of money you are willing to invest along with the amount of owners will determine your percentage of the horse.
There is less risk associated with syndicates since owners are only investing to purchase a portion of a thoroughbred horse instead of buying the horse out right.
There are many options for buying a racehorse which will ultimately determine the cost.
The main thing is to budget the amount you can spend on purchasing a horse as well as factoring in the amount it costs to care for and train your horse.
Some possibilities include a syndicate or partnership which would have an initial cost of $1000 – $10,000 and include multiple others involved in the ownership of the horse.
Or you may consider spending $5000 – $10,000 with two or more partners on an inexpensive horse. Keeping in mind that the cost of care and training a racehorse is an additional $35,000 – $40,000 per year.
If you want to own a horse on your own or with one other partner you could be looking at costs of $50,000 – $100,000+ which includes the purchase, care and training for the duration of the horse’s career while in your ownership.
Before purchasing a racehorse it is advised that you first select a trainer who will be training the horse for you. When choosing a trainer you will want to align yourself with someone who has a good team behind them and is a fit with the vision of what you hope to experience. Some trainers specialize in developing young horses to race while other trainers have better success with claiming horses from races.
You should plan ahead and decide on the amount you have to spend on the purchase of your horse and be prepared to factor in the cost of care and training. You may find that you should consider partners or joining a syndicate (see below – Types of Racehorse Ownership in Ontario).
Your trainer can then assist you with the selection and purchase of your horse and can also review the costs associated with your horse in training. A trainer can provide guidance and answer many of your initial questions.
You can also buy a racehorse with the help of a bloodstock agent who can help you choose a horse from a sale or private purchase. If you purchase a horse with an agent you will then need to choose a trainer to get the horse to the races.
Keep in mind, like any other profession, you are choosing professionals in their field and while you will want to learn and be involved you should allow them to do what you have hired them to do and trust their knowledge and expertise.
In Ontario, all individuals/businesses or stables with a 5% share or more in a racehorse must register as an owner online with the Alcohol and Gaming Commission of Ontario (AGCO). You must own a horse or a share in a horse before you can be licensed as an owner. The cost of an owner license in Ontario is $100 per year and you will also have to file an Authorized Agent form ($100 fee) to allow your trainer to make training and entry decisions on your behalf.
As an owner you can design and create your racing silks which will be worn by the jockey riding your horse. The design and colours must be approved by the race track before you have your silks made to ensure that they are not the same or too similar to other existing silks. Your trainer will be able to provide you with a timeline as to when you should have your silks made to ensure that they are ready for your horse’s first race.
As an owner you should plan ahead for the eventuality of when your horse’s racing career has ended. Given the life expectancy of 15 to 20 more years (after their racing career) and depending on the circumstances, your horse can be re-trained to go on to a second career as a show or riding horse or can be retired as a companion horse at a loving forever home. If you are in a partnership or a syndicate this decision should be made in advance and ideally written into any contracts or agreements.
There are registered Thoroughbred Retirement agencies to help to ensure that your horse retires to a reputable facility.
Thoroughbred racehorse ownership can be an exciting opportunity and many owners have enjoyed owning successful runners and have made a profit in the game. Along with the thrills and high emotions, ownership is also speculative and high risk. Before owning a racehorse you have to understand that not all horses are destined for greatness and not all will live up to high expectations. As an owner you have to be prepared for highs and lows both financial and emotional.
The best way to measure success as an owner is by becoming involved, learning all there is to know about the game while interacting with your horse and getting to know the people who work with and care for them.
There are ownership options for just about everyone!
Racehorse ownership has evolved in recent decades and you will find that even with a limited budget there are options for enthusiasts to share the costs (and the fun) of the racehorse ownership experience.
This is where you own the horse(s) outright and you are responsible for all training and racing costs and will solely reap the benefits of any purse money and bonuses earned by your horse(s). Decisions with your trainer will be solely made by you.
Co-owning and partnerships on a horse(s) with friends, family or colleagues. With two or more registered owners to run in their own names or a partnership name. The co-owners or partnership will need to determine the share percentage for each on the horse(s) and each will be responsible for that same percentage of costs as well as purse money and bonus distribution.
Similar to Partnerships, Syndicates are generally run by a syndicate manager and the horse(s) races under the syndicate name and in the syndicate colours. While the persons in the syndicate are treated as if they are co-owners, a syndicate agreement would determine initial and/or annual costs or fees, administration costs as well as purse and bonus payouts and rules of the syndicate. The benefits of syndicates are that they allow you to enjoy the full ownership experience at a fixed cost.
As a member of a racing club you can enjoy some of the benefits of racehorse ownership but without ownership right of the horse(s). Your fee will include you in the excitement of horses running in the Club’s colours and will give you an opportunity to experience the social benefits at a fixed annual rate.
A licensed company, farm or stable can own a horse(s) under the name of the business and can own horses outright or within a partnership or syndicate. You can operate your horse ownership as a business and can claim expenses and losses through your business.
Leasing a racehorse(s) from the horse(s) legal owner for a set period of time. The lease can be for a one off race or a season or for the entire racing career. This option offsets the initial cost of buying the horse. Costs and purse earnings would be determined under the contract of the lease. At the end of the term the ownership returns to the legal owner
Contact the HBPA of Ontario’s Ownership Specialist to provide a current list of available trainers, agents, syndicates/partnerships and boarding farms or stables.
When your trainer has determined that your horse is ready to race, they will make an entry into a race where they feel your horse will be competitive. The trainer will take into consideration the distance, the surface (turf, dirt or synthetic) and the level (Stakes, Allowance, Maiden, Claiming etc) and the purse or prize money being offered. The trainer will also choose the jockey who will ride your horse. Once the entry is made, the racetrack race office will determine if there are enough entries for that chosen race. If the race has enough participants, the post positions are drawn and the races are scheduled for that day’s race card.
At the racetrack, owners are permitted to join the trainer in the paddock while their horse is being saddled for the race and you can meet the jockey before they mount your horse.
You can cheer on your horse from the trackside apron or the grandstand seats and if your horse wins, you and your family and friends can have your picture taken with your horse in the winner’s enclosure.
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