Canadian Controlled Private Corporation

(CCPC in RRSP)

 

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A CCPC is a private corporation  that is controlled solely by Canadian residents with an active business carried primarily in Canada.  Indirect control by a public corporation and/or non-residents does not qualify.

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Private shares are issued by many startup businesses for funding purposes and these shares can be purchased in a Registered Savings Plan subject to certain restrictions based on the CRA Tax Act.

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Let us address your concerns regarding the different types of CCPC investments, providing that you have;

• consulted with your Tax Adviser on the small business capital gains exemption and the 10% rule  

• documented confirmation from the CCPC Chartered Accountant that the private corporation is eligible 

• acquired verification noting the subsections of the Tax Act under which the CCPC falls 

 

 

Rule of Thumb

An investor along with any related persons who own directly or indirectly more than 10%; 

• cannot, in their RRSP, hold the private corporation shares and/or debt issue,

• unless it's an arm's length relationship where the total cost of all shares held collectively is under $25,000.

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Note that, a qualified investment at the time of purchase of shares into an RRSP can become a prohibited investment if the corporation does not meet the specified small business corporation requirements.

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Income Tax Disclaimer
Echelon Wealth Partners Inc., its divisions, subsidiaries, and affiliates, do not provide any income tax advice and does not supervise or review any income tax returns. Please consult your accountant.