What is a Canadian-Controlled Private Corporation and what are the advantages?

A CCPC is a private corporation that is controlled by Canadian residents. A corporation will not qualify as a CCPC if it is controlled directly or indirectly by a public corporation, non-residents, or a combination of the two.

Advantages of being a CCPC:

Eligible for the small business deduction, which provides a reduction in the corporate income tax rate by 14.0%. The small business deduction applies to the first $500,000 of active business income. The small business deduction is calculated by multiplying the 12.5% by the least of the corporation’s active business income, taxable income, $500,000 (business limit), or its reduced business limit for the year.

Shareholder entitlement to an $800,000+ (for 2014, indexed after 2015) lifetime capital gains exemption on the disposition of qualified small business corporation shares.

An additional month to pay the balance of taxes payable.

Leave a Reply