How to Reduce Corporate Taxes, Manage Shareholder Loans, Avoid Personal Services Business Status, and Revive a Dissolved Corporation in Canada

Running a successful corporation in Canada involves not only growing your business but also strategic tax planning and strict compliance with Canada Revenue Agency (CRA) rules. This comprehensive guide covers how to reduce corporate taxes, manage shareholder loans, avoid Personal Services Business (PSB) status, and revive a dissolved corporation. Each section provides deep insights, practical examples, and actionable advice tailored to Canadian incorporated business owners. We’ll also highlight key Canadian tax strategies (e.g. corporate tax planning Canada, shareholder loan CRA rules, avoid PSB classification, Alberta corporation revival, CRA corporate compliance, small business tax strategy Canada) and link to relevant BOMCAS Canada services for further support.

Note: The information below is for educational purposes. For personalized advice, consult a professional accountant. BOMCAS Canada offers expert guidance in all these areas – from corporate tax optimization to bookkeeping, compliance, and corporate revival. Read on, and discover how to save on taxes legally and keep your corporation in good standing.

Corporate Tax Planning Strategies to Reduce Corporate Taxes in Canada

Reducing corporate taxes starts with smart tax planning strategies that make full use of Canada’s small business incentives and deductions. Canadian-controlled private corporations (CCPCs) benefit from a preferential small business tax rate on active business income up to $500,000. Incorporated small businesses pay around 12% tax (combined federal-provincial) on profits under the $500k threshold, whereas income taken personally would be taxed at higher personal rates. This small business deduction (SBD) is a cornerstone of corporate tax savings – ensuring you maximize the SBD can save tens of thousands in tax annually on eligible income. Here are key strategies to consider:

• Use the Small Business Deduction (SBD) Fully: Keep your taxable active business income below the $500,000 SBD limit whenever possible to enjoy the low small-business tax rate. For instance, if your company approaches the threshold, you might defer some income to the next year or split income with another corporation if appropriate. Staying under the SBD limit can yield substantial savings – one example showed a corporation saving roughly $30,000 per year in combined federal-provincial tax by utilizing the full SBD on $500,000 of income. Be mindful that passive investment income (over $50,000) can erode your SBD room, so plan investments carefully.
• Optimize Salary vs. Dividends (Income Distribution): As an owner-manager, you control how you pay yourself – either through a salary (which is deductible to the corporation) or dividends (which are not deductible but taxed at a lower rate personally). Each has advantages. Salary reduces corporate profits (lowering corporate tax) and generates RRSP contribution room for you, but comes with CPP and source deductions. Dividends are taxed more lightly than salary (no CPP, and eligible for dividend tax credit), aiding tax deferral by keeping income in the corporation longer. Often, a balanced approach or timing dividends in low-income years works best. For example, some owners choose to retain earnings in the corporation during high-income years, then pay themselves dividends later when they are in a lower personal tax bracket – deferring personal tax and saving money over time. Always plan dividend payouts in line with legal share structures and consult a tax advisor to avoid adverse consequences.
• Split Income with Family Members (Carefully): If family members support the business, consider making them shareholders or paying them a reasonable salary. Properly documented income splitting – such as paying dividends to an adult spouse or child shareholder who is in a lower tax bracket – can reduce the overall family tax bill. For instance, distributing $50,000 of dividends among family members with low income saved one family about $12,000 in taxes. Caution: Canada’s Tax on Split Income (TOSI) rules may apply, taxing certain split income at the top rate if the family member isn’t actively involved in the business. To avoid TOSI, ensure the family member contributes meaningful work or meets an exemption (e.g. over age 65 or the business is large enough). With proper planning, income splitting remains a viable strategy for many small businesses.
• Maximize Business Expense Deductions: Every legitimate business expense you claim reduces your taxable profit. Review all your expenses to ensure you’re writing off everything allowable – from office supplies, marketing costs, and professional fees to vehicle expenses and a home-office portion (if you work from home). For example, if you operate from home, you can deduct a percentage of utilities, mortgage interest, property taxes, and maintenance proportional to your work use. Keep personal expenses separate from business – use dedicated business bank accounts and credit cards – so you never miss out on deductible costs or run afoul of CRA by mixing personal items. It’s wise to incur necessary expenses before year-end rather than after, to accelerate deductions into the current year. Also consider allowable tax credits: for example, the Scientific Research & Experimental Development (SR&ED) credit if you engage in R&D, or various provincial credits. Proper documentation is crucial for all claims (e.g. keep receipts, invoices, logs) to survive a possible audit.
• Accelerate Capital Cost Allowance (CCA) Claims: If your business acquires depreciable assets (equipment, machinery, vehicles, etc.), strategize your Capital Cost Allowance claims. Canada’s tax rules let you deduct a percentage of an asset’s cost each year. By front-loading CCA (for instance, using accelerated depreciation rules or timing asset purchases just before your fiscal year-end), you can defer taxes. For example, buying a $100,000 equipment in Class 8 (20% rate) late in the fiscal year still allows a half-year rule deduction. Maximizing CCA in the first year could defer over $10,000 in tax on that purchase. Just ensure you classify assets in the correct CCA class and be aware that if you sell the asset later, CCA “recapture” income may occur. Still, timing asset purchases and claiming CCA wisely can significantly boost cash flow.
• Consider a Holding Company or Other Structures: For some businesses, setting up a holding company or a family trust can provide tax advantages. A holding company can receive dividends from your operating company tax-free (under the inter-corporate dividend rules) and invest surplus cash or assets separately – potentially protecting assets and avoiding the small business deduction grind-down from passive investment income. Holding companies are also useful in succession planning (e.g. facilitating the sale of shares or passing the business to children with potential tax deferral using rollovers). However, these structures add complexity and cost, and must be done in compliance with anti-avoidance rules. Always seek professional advice to determine if this is beneficial for your situation.

In addition to the above, always stay informed on current tax laws and opportunities. For instance, contributing to a personal RRSP or TFSA with your salary can indirectly save taxes (RRSP contributions are deductible, and paying yourself salary to maximize RRSP room can be part of a plan). Also, if you ever sell your business, ensure you qualify for the Lifetime Capital Gains Exemption (LCGE) on shares of a Qualified Small Business Corporation – a one-time huge tax break on capital gains. Each of these strategies should be tailored to your corporation’s needs and reviewed annually.

Internal Tip: Corporate tax planning is not a one-time task but a year-round effort. Consider scheduling regular check-ups with your accountant to adjust your strategy as your business grows or tax rules change. At BOMCAS Canada, our experts specialize in Corporate Tax Services – we can develop a customized tax plan that aligns with CRA regulations and saves you money. By implementing the right small business tax strategies in Canada, you keep more of your hard-earned profits to reinvest in your business.

Managing Shareholder Loans: CRA Rules and Best Practices

Shareholder loans are a common yet tricky aspect of managing a corporation’s finances. A shareholder loan generally refers to any funds owed between the shareholder and the corporation – this can be money you (as a shareholder) loaned into the company or money you withdrew from the company that wasn’t declared as salary or dividend. These transactions are recorded in a shareholder loan account (often labeled “Due from Shareholder” or “Due to Shareholder” on the books). Properly managing this account is critical because the CRA has strict rules to prevent abuse: if a shareholder takes money out of the corporation and does not repay it within a certain time frame, it may be treated as taxable income to the shareholder.

CRA’s Shareholder Loan Rule: Under the Income Tax Act (ITA), if you borrow funds from your corporation, you must repay the loan by the end of the corporation’s next fiscal year (essentially within one year after the year the loan was made) to avoid it being included in your personal taxable income. For example, if your corporation’s year-end is December 31 and you took a shareholder loan in June 2025, you have until December 31, 2026 to repay it. Failing to do so means the loan amount could be added to your 2025 personal income (the year the loan was received) and taxed accordingly. The CRA also prevents “gaming” this rule – simply repaying a loan right before the deadline and immediately re-borrowing after could be viewed as a series of loans and repayments designed to circumvent the rules. In short, a shareholder loan should be truly temporary, or else expect to face a personal tax bill.

Double Taxation Danger: Why is CRA so strict about this? Because without precautions, a shareholder could withdraw corporate funds (taxed at the low corporate rate) for personal use without paying personal tax. The rule ensures that such withdrawals are either properly repaid or taxed as if they were a salary/dividend. If you ignore this, you risk double taxation – the corporation already paid tax on its profits, and then you’d pay personal tax on the same funds treated as income. This is clearly something to avoid. To illustrate: suppose your company earned $100,000 and you took $30,000 via an undocumented shareholder loan. The company will pay corporate tax on the $100,000 profit. If you don’t repay the $30k and CRA assesses it as your income, you’ll also pay personal income tax on that $30k – effectively taxing that money twice (corporate + personal).

Best Practices for Shareholder Loans:

• Keep Personal and Business Finances Separate: Use a dedicated business bank account for all corporate transactions, and avoid using corporate funds to pay personal expenses. Any time you accidentally pay a personal expense (like a home bill or a personal purchase) with the company card, record it clearly as a shareholder withdrawal that you owe back. Blurring personal and corporate spending not only risks missed deductions (if a genuine business expense is wrongly treated as personal) but can inflate your shareholder loan balance unexpectedly.
• Document All Shareholder Transactions: Whenever you take money out of the company (other than regular payroll or declared dividends), make sure it’s recorded in the books as a shareholder loan. Likewise, if you put in funds (say, you paid a business expense with personal funds or infused cash to cover a shortfall), record that as a loan from you to the company. Maintaining a clear running balance of what the company owes you or what you owe the company helps avoid confusion. At year-end, your accountant should review the shareholder loan account for any outstanding amounts.
• Plan for Repayment or Proper Payout: If you do take a shareholder loan for short-term personal cash needs, have a plan to repay it within the required timeframe – mark the deadline on your calendar well in advance. Repayment can be as simple as transferring money from your personal account back into the corporate account (with proper memo). If your corporation can’t afford to have you repay it in cash (for instance, the funds are spent), the other option is to declare it as compensation. Typically, this means either bonusing it out as a salary or declaring a dividend to clear the loan. Declaring a bonus salary of that amount will give the company a deduction (offsetting the loan, which then effectively becomes your employment income). Declaring a dividend will tax you personally on that amount at dividend rates. Both methods result in you paying personal tax on the funds – which you would have had to anyway – but crucially, they avoid the double-tax trap because the loan is closed properly by a taxable event. Many owner-managers declare a year-end dividend or bonus to clear any shareholder loan balance owing to the company.
• Avoid Recurring Loan Balances: It’s best not to treat your corporation like a personal ATM. Repeatedly drawing loans and repaying can attract scrutiny, especially if done in a manner to skirt the one-year rule (CRA’s “series of loans and repayments” anti-avoidance provision). If you find you need regular draws from the company for living expenses, it may indicate you should be taking a regular salary or periodic dividends instead. Structure your compensation plan with the help of an accountant so that you’re not relying on undocumented loans.
• Charge Interest if Required: There are circumstances where a shareholder loan can remain outstanding longer (for example, loans to buy a home or car, or loans to another corporation in some cases), but strict conditions apply such as charging interest at prescribed rates. These are complex exceptions – generally beyond the scope of this article – and require professional guidance. When in doubt, err on the side of clearing loans annually.

In summary, manage shareholder loans proactively. The goal is to prevent unexpected tax bills and keep the relationship between you and your company clean. Regular bookkeeping reviews will help catch any transactions mistakenly hitting the shareholder loan account (e.g. personal items booked as business or vice versa) so they can be corrected before year-end. Our team at BOMCAS can assist with bookkeeping and payroll services to ensure all such transactions are recorded accurately. By staying on top of this, you’ll remain CRA-compliant and maintain the full benefit of the corporation’s lower tax rate without surprises. If you’re unsure about a shareholder withdrawal or already have a sizable balance owing, consult BOMCAS Canada’s corporate tax advisors for the best way to resolve it – before the CRA forces a costly inclusion in income.

Avoiding Personal Services Business (PSB) Status in Your Corporation

One of the biggest tax pitfalls for small incorporated businesses is falling into the Personal Services Business (PSB) category. A PSB, in simple terms, is what the CRA calls an “incorporated employee” – a corporation that exists mainly to provide services of an individual who would otherwise be considered an employee of the client. In other words, if you set up a one-person corporation but you’re essentially working like an employee for a client (or former employer), your corporation could be deemed a personal services business. The implications of PSB status are significantly negative from a tax perspective, so it’s crucial to understand and avoid this classification if possible.

Why PSB Status is Problematic: Income earned by a corporation classified as a personal services business loses the small business deduction and other tax advantages. PSBs are not eligible for the general rate reduction or the small business tax rate – meaning they pay the full corporate tax rate on all income. Federally, this base rate is 38%, and while a portion is offset by an abatement, effectively PSB income is taxed around the top corporate rate (~33% or more, depending on the province). In addition, the federal government levies an extra 5% tax on PSB income. So instead of enjoying the ~12% small business tax rate on the first $500k, a PSB might be paying upward of 40% tax on its earnings. Ouch! On top of that, deductions are severely restricted – a PSB can generally only deduct the salary and benefits paid to the incorporated employee (and a few minor expenses like accounting/legal fees). Ordinary business write-offs (rent, supplies, advertising, etc.) are disallowed. The result is a much higher taxable income and tax bill. Clearly, no small business owner wants this status if they can avoid it.

What Triggers PSB Status: The CRA uses several criteria (mirroring the tests for employee vs. independent contractor status) to determine if a corporation is carrying on a PSB. All of the following conditions need to be met for a corporation to be deemed a PSB:

1. Services through a Corporation: The individual provides services to clients through their own corporation (this is given if you’re incorporated and contracting).
2. Specified Shareholder: The worker (or their related party) owns ≥10% of the corporation (so most owner-managers meet this).
3. Limited Employees: The corporation has five or fewer full-time employees throughout the year. (If you employ more than 5 full-time employees, you automatically break out of the PSB definition – the assumption is that a firm with 6+ employees is a genuine business, not just an incorporated individual.)
4. Unrelated Client: The service revenue in the year is from a client that is not associated with your corporation. (If your payer is associated – e.g. you own or control both companies – then PSB rules might not apply, though other rules will.) This is an uncommon scenario.
5. Employee-Like Relationship: Critically, if it were not for your corporation, the worker would reasonably be considered an employee of the client (the payer). This is the core of a PSB – the nature of the working relationship is essentially employer-employee.

If all five conditions are met, the CRA will classify the corporation’s income as PSB income. Many independent contractors easily meet #1-4; the grey area is usually #5, which boils down to the classic employee vs contractor tests (control, ownership of tools, chance of profit/risk of loss, integration, etc.). For example, if you work for only one client who dictates your schedule, you use their equipment, you don’t have the opportunity for profit beyond your fee, and you’re integrated into their operations – you look like an employee, and you’re at high risk of PSB designation.

How to Avoid Being Labeled a PSB: The goal is to structure your business activities such that not all of the above conditions are met – particularly condition #5. Here are practical steps to reduce your PSB risk:

• Diversify Your Client Base: If possible, have multiple clients or contracts rather than a single source of income. Being tied to one client, especially for a long time, raises suspicion. When you serve multiple independent clients, it’s more evident that you are operating a business. If you currently have one main client, seek out at least a few smaller clients or side projects.
• Act Like an Independent Business: This means assert control over how the work is done, where feasible. Employees are told how/when to work, but true consultants/contractors negotiate terms and often set their own schedules. Whenever you sign a contract, ensure it reflects an independent contractor relationship: e.g., you are responsible for results but not subject to day-to-day supervision, you provide your own tools/equipment, you can hire subcontractors or assistants (even if you don’t, having the right to can help demonstrate independence), and you carry your own business insurance. If appropriate, use your own business premises (even a home office) rather than working on-site at the client’s office all the time.
• Avoid Perks and Titles of Employment: Little signs can have big implications. Don’t take on a job title at the client’s organization (like “Interim Manager” – you should be “Consultant” or similar). Avoid using the client’s internal email or business cards as if you’re an employee. And certainly, you should not receive employee-like benefits (health benefits, paid vacation, etc.) from the client. Those are indicators of employment.
• Employ Others or Subcontract: While hiring five full-time employees just to dodge PSB status isn’t practical for everyone, even having one or two employees or regular subcontractors can help demonstrate that you are a business with your own staff. If you can grow to the point of >5 full-time employees, you completely eliminate the PSB issue by definition. If not, at least the fact that you have employees on payroll working for your company (even part-time) shows you’re more than just an individual-for-hire.
• Get a Written Contract: Always have a contract for services with each client that clearly outlines the contractor relationship. It should state that your company is providing services as an independent contractor, you will invoice for work, you maintain your own liability/WSIB insurance, etc. While a contract isn’t ironclad proof, it’s a first line of defense. Also ensure the contract doesn’t include clauses that bind you like an employee (non-compete clauses similar to an employee’s, or requirements to adhere to employee policies).
• Avoid Long-term Exclusivity: If you work on a series of projects for one client, try to structure it as separate contracts for each project rather than an open-ended, full-time arrangement. Also, if you can afford to, take short breaks between contracts or have gaps where you serve other clients. An uninterrupted multi-year full-time relationship with one client is high risk. If that’s your situation (some industries like IT consulting often have this), be extra diligent with the other factors (own tools, etc.) and consult a tax professional.
• Document “Business-like” Aspects: Keep evidence of the ways your corporation operates as a business. For example, maintain a company website and business cards, advertise your services publicly, attend networking events to find new clients, and invoice the client (employees don’t invoice employers). Showing the CRA that you actively market your business and seek new contracts helps reinforce that you are not just an employee in disguise.

Despite best efforts, some scenarios are inherently risky. For instance, many incorporated truck drivers or real estate agents have one broker or contract – by the nature of the industry, they might fall under PSB unless they meet an exception. If you’re unsure of your status, get professional advice. Misclassification can lead to back-taxes, interest, and penalties if the CRA reassesses past years as PSB income. In borderline cases, you might consider a binding ruling from CRA, but generally it’s better to proactively adjust your situation to be clearly a business.

Bottom Line: Avoiding PSB status means truly being in business for yourself. It may require adjustments in how you operate, but it’s well worth it to preserve the advantageous small business tax rate and deductions. If you suspect your corporation could be considered a personal services business, reach out to a tax expert. BOMCAS Canada’s team can review your circumstances and help you implement strategies to avoid PSB classification while staying within the law. Our corporate tax planning expertise ensures you remain eligible for the small business deduction and CRA corporate compliance standards. Don’t wait for a CRA audit to find out you’ve been on the wrong side of the PSB rules – act now to secure your tax benefits.

Reviving a Dissolved Corporation in Canada (Alberta Focus)

What happens if your corporation has been dissolved – whether voluntarily (you closed it) or involuntarily (for example, struck off by Alberta’s registry for failing to file annual returns)? All is not lost. In many cases, you can revive a dissolved corporation and restore it to active status. This may be necessary if you want to resume business operations under that company, or perhaps access assets that were held by the corporation, or simply correct an unintended dissolution. This section explains how to revive a corporation in Canada, with a focus on Alberta corporation revival (though processes are similar in other provinces, specifics will vary).

Why and When to Revive: Common reasons for revival include: accidentally allowing the corporation to be dissolved (not filing annual returns or failing to maintain a registered office), realizing there are still business activities or assets under the corporation, or needing the corporation for a new venture. Sometimes a corporation is dissolved during a tax reorganization or by mistake and needs reinstatement. If the corporation owned property at dissolution, that property typically escheats to the government (province) until a revival claims it back. Revival essentially puts the corporation back into existence as if it had never been dissolved (in most cases), meaning legal continuity is restored.

Time Limit – Don’t Wait Too Long: There is a limited window to revive a corporation. In Alberta, you cannot revive a corporation more than 10 years after the date of dissolution. If your company was dissolved 11+ years ago, revival is no longer available – you’d likely have to incorporate a new company (and the old one remains permanently dead). Other jurisdictions have similar or shorter limits (for example, federal corporations under the CBCA also have a 10-year limit in many cases). So, act promptly when revival is needed.

Who Can Apply for Revival: Typically an “interested person” must apply to revive. This usually includes former shareholders, directors, or creditors of the dissolved company. If you were an owner or director, you qualify. Even someone with a legal claim against the company could apply (with court permission). In Alberta, if you were a director or shareholder at dissolution, you can proceed through a registry agent; if you weren’t directly connected (e.g., a creditor), a different process through Corporate Registry is required.

Steps to Revive an Alberta Corporation: The process in Alberta involves a few key steps (and a similar outline applies in other provinces):

1. Complete Revival Forms: You must fill out the required forms, primarily the Articles of Revival, and also provide up-to-date Notices for the corporation’s address, directors, and agent for service. Essentially, you are re-registering all the pertinent info for the company as part of bringing it back on record. Alberta conveniently provides these forms (Articles of Revival, Notice of Address, Notice of Directors, Notice of Agent for Service). If the corporation was missing annual returns before dissolution or if time has passed, you also need to prepare annual return filings for each year that was missed (including the year of dissolution). All outstanding fees or penalties to Corporate Registry would have to be paid as well.
2. Name Availability (NUANS Search if needed): If your corporation was dissolved for a while, its original name may have been taken by another business. In Alberta, if the corporation has been dissolved for 3 or more years, you must obtain an Alberta NUANS name search report to see if a similar name exists now. If the name is available, you can usually revive under the old name. If not (someone else took a confusingly similar name), you might have to choose a new name as part of revival or revive it as a numbered company to avoid conflicts. Note: If your company was a numbered company (e.g., 1234567 Alberta Ltd.), name availability isn’t an issue – numbers are unique.
3. Submit to Authorized Service Provider: In Alberta, most corporate registry transactions (including revival) are done via authorized registry agents (service providers). Once your forms are filled and you have the NUANS (if required), you submit the package to a registry agent along with the government revival fee and the agent’s service fee. As of this writing, the government fee varies (for-profit company revival fee is in the few hundreds of dollars, plus agent fees). The registry will process the application. If you (the applicant) were a director/officer of the company before, the agent can handle it directly. If the applicant is a third party (with no prior role in the company), the process might be routed through the central Corporate Registry office with possibly a court order or special permissions – but for most owners reviving their own company, it’s straightforward.
4. Obtain Certificate of Revival: Once approved, the government will issue a Certificate of Revival (or “Certificate of Continuance” in some provinces) with the effective date of revival. At that point, your corporation is officially active again – its status changes from “dissolved” to “revived” (active) on the registry. The company essentially regains its rights as if it had been active all along. You should then treat it like an active company: ensure you file annual returns going forward, maintain a registered office, etc., to avoid a repeat dissolution.
5. Post-Revival Housekeeping: Revival doesn’t automatically fix everything. You’ll need to address any tax filings that were missed during the period of dissolution. Often, if a corporation was dissolved, no corporate income tax returns (T2) were being filed annually (since the company wasn’t active). However, legally the corporation didn’t exist in that period – once revived, the law may consider the corporation to have existed continuously. It’s wise to consult with a tax professional on whether back tax returns need filing. If the corporation carried on business unknowingly while dissolved (not uncommon, some owners keep operating unaware the company was struck off), you definitely need to file those returns to CRA and explain the situation. Also, if any assets/property went to Alberta’s Unclaimed Property due to dissolution, you’d work on reclaiming those now that the company is revived. Finally, if you had let your CRA program accounts (like Business Number, GST account, payroll account) get closed, you’ll have to reactivate or re-register them.

Reviving a corporation can be a complex task, but it’s a well-trodden path. To simplify the process and ensure no step is missed, many business owners seek assistance from accounting and legal professionals. BOMCAS Canada offers support in reviving Alberta (and other provinces’) corporations, including preparing the required documents and advising on any CRA compliance issues arising from the dormancy period. If you need to bring your company back to life, our Alberta incorporation services team can guide you through every step – from NUANS name searches to liaising with registry agents and getting your corporate records and taxes up to date.

Pro Tip: If you’re unsure whether to revive an old corporation or start fresh, consider the context. Revival makes sense if the corporation has valuable attributes – for example, it owns assets, has a history/branding you want to continue, or tax advantages like loss carryforwards that can be used. If not, sometimes incorporating a new company could be simpler. An expert can help you weigh the pros and cons.

Conclusion: Stay Compliant and Proactive with Professional Help

Managing a corporation’s affairs in Canada – from minimizing corporate taxes to complying with CRA rules on shareholder loans and PSBs, and handling corporate status changes – can be challenging. However, with knowledge and planning, you can significantly reduce your tax burden while staying on the right side of regulations. Key takeaways include:

• Plan Ahead for Taxes: Implement year-round corporate tax planning and revisit your strategy annually. Use all available tools like the small business deduction, income splitting (where appropriate), and expense deductions to keep your taxable income low. Proper planning can legally save you thousands and free up cash flow for growth.
• Maintain CRA Compliance: Always file returns on time, keep organized records, and document transactions. The CRA expects diligent record-keeping and timely reporting – for instance, corporate tax returns are due within six months of year-end. Good compliance habits help you avoid penalties and audits. If the CRA does inquire, having paperwork in order for things like shareholder loans or contractor agreements will make the process smooth. It’s easier to stay out of trouble than to fix mistakes later.
• Watch for Red Flags: Monitor areas that commonly trigger CRA attention – large or unusual shareholder loans, aggressive income splitting without a clear rationale, or a one-person corporation that looks like an employee. By being mindful of these, you can take corrective action (like repaying loans or adjusting contracts) before the CRA steps in.
• Use Professionals as Partners: Canadian tax laws and corporate regulations change frequently, and every business is unique. Engaging a professional accountant or tax advisor is an investment that pays off. They can spot opportunities (e.g. new tax credits, better structure) and ensure you don’t miss compliance obligations. For example, a knowledgeable accountant will keep track of your CRA corporate compliance checklist – from GST filings to T4s – so nothing falls through the cracks. With a firm like BOMCAS Canada by your side, you get peace of mind that experts are looking out for your best interests and keeping you updated on relevant changes.

Running your corporation effectively means wearing many hats, but you don’t have to do it all alone. BOMCAS Canada is a full-service accounting and tax firm that specializes in helping Canadian small businesses thrive. Whether you need aggressive tax planning to reduce your corporate taxes, guidance on properly managing shareholder loans, strategies to avoid PSB status, or assistance to revive a dissolved corporation, our team is here to help. We also offer comprehensive services like bookkeeping, payroll, corporate tax return preparation, and incorporation support – everything to keep your business financially healthy and compliant.

Call to Action: Ready to optimize your tax strategy and ensure your corporation is on solid ground? Book a consultation with BOMCAS Canada today. Our friendly experts will review your situation one-on-one and develop a tailored plan that saves you money, mitigates risks, and sets your business up for long-term success. Let us handle the complex tax and compliance matters while you focus on what you do best – running your business. Contact BOMCAS Canada now to get started, and take the next step toward peace of mind and greater profitability for your corporation. We look forward to being your trusted partner in all your accounting and tax needs.