If I own multiple corporations in Canada, what are some ways I can move funds around?

Allan Madan, CA
 Nov 12, 2013


For example, assume that you own 100% of the shares of a holding corporation (i.e. parent company) and your holding corporation in turn owns 100% of another active corporation (i.e. subsidiary company). In this context, how can the parent and subsidiary companies transfer money between each other? The subsidiary can:

  • Pay a tax-free dividend to the parent
  • Return the capital invested in the subsidiary to the parent up to the ‘paid up capital’ amount (i.e. the amount of the initial investment) on a tax-free basis

Both the parent and subsidiary can:

  • Make a loan
  • Return payment of a loan already made
  • Purchase an asset



The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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