What is a CCPC?
As the name implies, a Canadian-controlled private corporation has to be private. It also has to meet all of the following conditions:
•it is a corporation that was resident in Canada and was either incorporated in Canada or resident in Canada from June 18, 1971, to the end of the tax year;
•it is not controlled directly or indirectly by one or more non-resident persons;
•it is not controlled directly or indirectly by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700);
•it is not controlled by a Canadian resident corporation that lists its shares on a designated stock exchange outside of Canada;
•it is not controlled directly or indirectly by any combination of persons described in the three previous conditions;
•if all of its shares that are owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation with a class of shares listed on a designated stock exchange, were owned by one person, that person would not own sufficient shares to control the corporation; and
•no class of its shares of capital stock is listed on a designated stock exchange.
As the name implies, a Canadian-controlled private corporation has to be private. It also has to meet all of the following conditions:
•it is a corporation that was resident in Canada and was either incorporated in Canada or resident in Canada from June 18, 1971, to the end of the tax year;
•it is not controlled directly or indirectly by one or more non-resident persons;
•it is not controlled directly or indirectly by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700);
•it is not controlled by a Canadian resident corporation that lists its shares on a designated stock exchange outside of Canada;
•it is not controlled directly or indirectly by any combination of persons described in the three previous conditions;
•if all of its shares that are owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation with a class of shares listed on a designated stock exchange, were owned by one person, that person would not own sufficient shares to control the corporation; and
•no class of its shares of capital stock is listed on a designated stock exchange.
The biggest corporate tax advantage of being a Canadian-controlled private corporation is being eligible for the small business deduction. This corporate tax deduction is calculated as 16.5% (as of January 1, 2010) of the least of a corporation's active business income, taxable income or business limit for the year. The small business deduction applies to the first $500,000 of active business income. Therefore, you company would only pay $16,500 on $100,000 of business income- on the other hand, and individual would pay $27,652 on the same $100,000 (fiscal year 2010 and Ontario resident)
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