Is it possible to merge two corporations tax free?
Allan Madan, CA
In order for two corporations to merge their businesses tax free, in Canada, the following conditions must be met before the merger:
- All of the corporations must be Canadian corporations. However, this does not mean that they nessecarily have to be CCPC, they only have to be considered to carry on active business in Canada.
- All assets and liabilities of the old corporation must become assets and liabilities of the new corporation.
- All of the shareholders of the former corporations must become shareholders of the new corporation.
If all three of these conditions are satisfied, the corporations will be eligible to amalgamate (merge) on a tax free basis.
Disclaimer
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.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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