Canadian-controlled private corporation
Favoured by small to medium-sized businesses, CCPCs offer tax advantages and are owned and controlled by Canadians. These corporations benefit from lower corporate tax rates, particularly on the first $500,000 of active business income, and are eligible for the small business deduction, enhancing their financial efficiency. Additionally, they have access to enhanced tax credits like the Scientific Research and Experimental Development (SR&ED) credit, offering support for innovation.
For shareholders, CCPCs provide perks such as dividend tax credits to mitigate double taxation and the potential for a lifetime capital gains exemption on the sale of qualifying shares. The ownership and control requirements ensure these benefits primarily support Canadian entrepreneurs, making CCPCs an ideal structure for domestic business growth.
To qualify as a CCPC, the corporation must:
- Be private (as in the shares are not for sale on any public stock exchange)
- Be resident in Canada
- Not be controlled by any non-residents
- Not be controlled by any public companies
- Not have any class of its shares listed on a public stock exchange
The CCPC is a popular corporate structure for small businesses in Canada.