Canada Revenue Agency · Active business & the small business deduction
Private-corporation restrictions
What the rule requires
ITA s. 89(1) keeps the corporation a private corporation for tax purposes by it not being, and not being controlled by, a public corporation. Restricted share transfers, a cap on holders and no public offering are the separate OBCA private-company mechanics that keep it there in practice.
Authority: ITA s. 89(1) ("private corporation"); OBCA
What goes wrong
The articles do not carry the full set of private-corporation restrictions.
What good looks like
Transfers are restricted, holders are capped at fifty and public offerings are prohibited. The corporation is drafted as a private corporation.
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An automated drafting scan, not legal or tax advice. It reads how the articles are drafted; it does not advise on your circumstances, and Capital Toolkit does not file articles with the Province.
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