Pages
Categories
Archives
Category Archives: Corporations
CDA
The capital dividend account of a corporation (“CDA”) is defined in subsection 89(1) of the Income Tax Act (Canada), and the definition requires that the balance of the account be calculated using something like the following formula: A + B … Continue reading
Posted in Corporations
1 Comment
Dividend Caps
Sometimes we receive instructions for incorporation that include a request to create shares with a fixed redemption amount and a right to receive unlimited dividends. We generally advise against creating such shares, especially if they are to be used in … Continue reading
Posted in Corporations, Estates and Trusts
Leave a comment
Dividends and Section 160
Assume that Corp X owes tax to the CRA. Assume that, while it owes that tax, Corp X pays a dividend to Mr. X who deals not at arm’s length with the corporation. What can the CRA do about it … Continue reading
Posted in Corporations, Individuals
Leave a comment
Directors and revival, again
In Leger v. The Queen, 2007 TCC 322 (which I discussed here) the Court held that the dissolution of a corporation that was later revived did not engage the two-year limitation period otherwise applicable under subsection 227.1(4) of the Income … Continue reading
Posted in Cases, Corporations
Leave a comment
Control Premiums
David Louis at Minden Gross has an interesting article in the October 16 issue of Tax Topics on control premiums for “thin voting shares” (shares that do not participate significantly in the earnings or assets of a corporation but that … Continue reading
Posted in Corporations
Leave a comment
Rectification, again
The Niagara region seems to be doing its part to contribute to the law of rectification in the tax context. Juliar v. Canada (Attorney General), 1999 CanLII 15097 (ON S.C.) originated in the peninsula. Now comes QL Hotel Service Limited … Continue reading
Posted in Cases, Corporations, Miscellaneous
4 Comments
Corporations as Beneficiaries
It is often quite useful to have Holdco own shares of Opco through a trust rather than directly. In general, the other beneficiaries of the trust can still claim the capital gain exemption in respect of a disposition of the … Continue reading
Posted in Corporations, Estates and Trusts, Individuals
2 Comments
Full-time Employees
To avoid being found to carry on a “personal services business” or a “specified investment business” under the Income Tax Act, a corporation must employ “more than five full-time employees”. The CRA, based on several tax court decisions, has stated … Continue reading
Posted in Cases, Corporations
Leave a comment
Paying dividends
Richard Weber at Taylor Leibow was kind enough to forward to me a CRA technical interpretation (2007-0229311I7) dated June 14, 2007, concerning the payment of dividends. A corporation purported to pay a capital dividend. The necessary election was filed, but … Continue reading
Posted in Corporations, Miscellaneous
Leave a comment
Leaving a Sinking Ship
The following article on resignation as a director of a corporation and directors’ liability under the Income Tax Act (Canada) appeared in the latest edition of the Hamilton Law Association Law Journal.
Posted in Corporations, Individuals, Miscellaneous
2 Comments