Photo of Dennis L. Nerland, QCBy Dennis L. Nerland, QCJune 07 2017
Tax Law

Corporations

Click here to view in PDF.

The corporation plays an integral part in personal wealth management.

Corporations can be utilized for the purpose of wealth creation due to the fact that a corporation is able to own property and carry on business. Business income generated by a corporation is usually taxed at a much lower rate than an individual. If the tax savings are reinvested in the business, producing more business income which in turn is taxed favorably, and so on, the result is a geometric progression of after-tax savings which outstrips rival strategies.

Corporations may also be utilized for wealth preservation due to the limited liability aspect that stems from their separate legal personality. A corporation has a distinct liability profile from its shareholders. The corporation alone is liable for its obligations, and the liability of its shareholders is limited to the amount of their investment in the corporation.

At death, a private corporation’s shares may not be required to be probated, which can provide advantages to the deceased and their survivors.

Invitation for Discussion:

If you would like to discuss this article in greater detail, or any other business law matter, please do not hesitate to contact one of the lawyers in the Tax group at Nerland Lindsey LLP.

Disclaimer:

Note that the foregoing is for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.

Related Insights

  • Canadian Companies Need to Assess Their “Foreign Private Issuer” Status for SEC Reporting Purposes
  • CSA Staff Says Most Coin/Token Offerings Are Securities
  • Letter of Credit Security and the “Autonomy Principle”
  • OSC Provides Guidance on Hostile Take-Over Bids
  • Trust Residency Post-Fundy
  • Coming Soon – Mandatory Privacy Breach Reporting and Record-Keeping
  • A Reminder for D&O’s re: Civil Liability for Secondary Market Disclosure
  • Canadian Disclosure Requirements for US Marijuana Issuers