What is the criteria for a small business in Canada?

Allan Madan, CA
 Nov 15, 2012
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According to Industry Canada, a small business is one that has 5 to 100 employees.

For CRA purposes in order to meet the small business deduction (SBD) and be eligible for the lower tax rate of 15.5% (combined Federal + Ontario),  the business must meet the Canadian-controlled private corporation (CCPC) criteria and have active business income up to $500,000.

For a corporation to be considered a CCPC, it must meet all of the following criteria:

  • it is a corporation that is resident in Canada.
  • it is not controlled directly or indirectly by one or more non-resident persons.
  • it is not controlled directly or indirectly by one or more public corporations.
  • it is not controlled by a Canadian resident corporation that lists its shares on a designated stock exchange outside of Canada.
  • it is not controlled directly or indirectly by any combination of persons described in the three previous conditions.
  • no class of its shares of capital stock is listed on a designated stock exchange.

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.

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