Add/Edit small business (CCPC)

Quick-Start: Not Optional.

The CCPC profile asks you for a nickname for the company (please don't use the real one), the province/territory of incorporation for tax purposes, the owner (you or your spouse), and if the CCPC is eligible for the Small Business Deduction.

For you, your spouse, and any dependents, we require to know their percentage ownership of the company and if dividend payments are allowed to that shareholder before the CCPC owner turns 65 (as that is often not the case for non-voting shareholders of professional corporations).

Although you can take up to the CDA balance out of the corporation tax-free, there can be high lawyer or accounting fees for doing so. To limit those fees, you can set a threshold dollar amount that CDA payments must reach before they are paid out. You can also add the expected fee amount if a CDA payment is paid. Both those entered amounts will be indexed to inflation in the TIME MACHINE.

If you plan to wind down the company, you can select the year for that to happen in the TIME MACHINE. At the end of the year of dissolution selected, all CCPC accounts will be liquidated and loans paid off. Any remaining cash value of any life insurance contracts owned by the CCPC will be received. After the corporate taxes are paid, the CCPC will distribute the remaining cash as dividends in a tax-efficient manner to the shareholders in accordance with their percentage ownership.

The MoneyReady App (and the CRA) treats the CCPC separately from your personal affairs. In the MoneyReadyApp, you will need to enter the net active revenues before salaries and dividends (in REVENUES) that are paid from the corporation to you or your spouse and dependents. You will also need to enter salaries and dividends paid to you, your spouse, and your dependents in INCOMES.

We allow unlimited CCPC investment accounts and loans but we do currently deal with other assets (e.g. real estate) in the corporation, at this time.

You may also have a separate holding company to hold the investments that generate passive income. This is usually done to preserve the CCPC shareholder's eligibility for the Lifetime Capital Gains Exemption (LTCGE), which the MoneyReady App does not yet consider. For the app, it is not necessary to separate the companies. The results shown for the CCPC will be a combination of the results of the operating plus the holding company. Note that because we don't cover the LTCGE, we also do not cover the selling of shares of the CCPC.

The corporate TIME MACHINE

The TIME MACHINE will invest any surplus retained earnings into the corporate investment accounts, and will withdraw from those accounts should you have negative earnings.

The accounts will grow with their investments and also be rebalanced to their target allocation each year, as for your personal accounts. This will generate passive income for the corporation, which is taxable and can affect the taxation of your active income.

The TIME MACHINE will estimate corporate taxes for the active and passive income, and keep track of the values of notional accounts for tax purposes for the corporations.

If you already have a corporation with REVENUES in the previous year(s), you will be asked for more information to get the initial values of the notional accounts before running the TIME MACHINE. The help for this page there will explain more.

The corporate accounts will be included in the TIME MACHINE output under the CCPC tab and as a separate tab in the Excel output.

Reviewing these results can help guide you in the amounts and timing of withdrawals from the corporation of eligible, non-eligible, and capital dividends.