Canadian Controlled Private Corporation (CCPC)

Canadian Controlled Private Corporation (CCPC)

CCPC Defined

A Canadian Controlled Private Corporation (CCPC) is a:

  • Private Corporation; that is
  • Not Controlled by Non-Canadian Resident Person (person = individuals, corporation); and
  • Not controlled by Public Corporations

Implications of Being a CCPC

  1. CCPC’s are eligible for the Small Business Deduction (a lower tax rate on the first $500,000 on active business income) i.e. combined Federal + Ontario tax rate of 13.5% as opposed to 26.5%
  2. Need to be a CCPC throughout the year to qualify as a Small Business Corporation
    • Benefits of small business corporation status:
      • QSBC and $$835,716 (2017), $848,252 (2018) Lifetime Capital Gains Deduction
      • Corporate attribution does not apply SBC’s paying the prescribed rates
  3. Higher SRED credits (35% for CCPC’s) and CCPC’s qualify for refundable SRED credits while all other corporations only qualify for non-refundable SRED credits
  4. CCPC’s need to keep track of the General Rate Income Pool (GRIP)
  5. Capital Dividend Account (CDA) – All private corporations (including CCPC’s) can pay tax-free dividends out of the CDA
  6. Later deadline to pay final remaining taxes (3 months after year end) as opposed to 2 months after year-end for regular corporations

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