Reasons Establishing A Corporation

There are three main reasons for establishing a Canadian-Controlled Private Corporation

  1. transferring liability
  2. more tax deductions
  3. low tax rate up to the Small Business Limit

The CDA allows a tax-free transfer to shareholders in some situations.

The three taxable ways to take money out of a corporation are

  1. taxable salary (deductible to the corporation)
  2. taxable bonus (deductible to the corporation)
  3. taxable dividends (paid from after-tax corporate income)

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