Shareholders of Canadian-controlled private corporations (CCPC) face a substantial barrier to the distribution of the corporation’s profits in the form of high combined personal and corporate tax rates.
Utilizing a unique structured flow-through share transaction, the Corporate Solution provides (i) tax deductions to reduce the corporation’s taxable income and (ii) an increase to the corporation’s Capital Dividend Account (CDA) which enables the shareholder to receive corporate cash tax-free. Together, these tax benefits result in the shareholder significantly increasing his or her after-tax share of the income earned by the corporation and paid out to the shareholder.
Before a client commits to a transaction, we arrange for a liquidity provider – typically, an institutional investor – to purchase the shares at a predetermined price. The buy and sell take place at the same time thereby eliminating price volatility and illiquidity risk – two major risks that could otherwise impact a participant’s return.