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What is a CCPC?

A Canadian Controlled Private Corporation is a private company that meets all the following conditions:  

 

1. It is a private corporation  

  • Its shares are not listed on a public stock exchange.  
  • It is owned by individuals or other private corporations.  

 

2. It is a Canadian corporation  

  • It was incorporated in Canada, or  
  • It is considered a resident of Canada for tax purposes.  

 

3. It is controlled by Canadian residents  

  • The corporation cannot be controlled—directly or indirectly—by:  
  • Non‑residents  
  • Public corporations  
  • A combination of the above  

 

4. Canadians hold more than 50% of voting control  

  • This refers to legal control, meaning:  
  • Canadians must control more than 50% of the voting shares,  
  • And must be able to elect the board of directors.  

Important:  

  • You do not need 100% Canadian ownership to be a CCPC.  
  • You only need majority Canadian control.  

 

Examples of a CCPC

Fully Canadian‑Owned Small Business  

  • Incorporated in Ontario  
  • Owned 100% by two Canadian residents  
  • Shares are not publicly traded  

 

60% Canadian Owners, 40% U.S. Owners  

  • Incorporated in Canada  
  • Majority of voting shares held by Canadian residents  
  • Even though there are foreign shareholders, Canadian residents control more than 50%.  

 

Examples of NOT a CCPC  

Owned by a U.S. Corporation  

  • Incorporated in Canada  
  • Majority voting control held by a non‑resident corporation  

 

Canadian Owners, but a Public Corporation Has Veto Rights  

  • Canadian residents own the voting shares  
  • A public corporation has special rights that influence decisions  

 

Startup with Convertible Notes Held by U.S. Investors  

  • Currently Canadian‑controlled  
  • But U.S. investors have rights that could convert into majority control  

CRA may consider potential control, not just current ownership. Professional advice is recommended.  

 

Checklist: Are You a CCPC?  

You are likely a CCPC if all fours apply:  

  • Your corporation is private  
  • It is incorporated or resident in Canada  
  • More than 50% of voting shares are controlled by Canadian residents  
  • No public corporation or non‑resident has direct or indirect control.  

 

Why CCPC Status Matters  

If your corporation qualifies as a CCPC, you may be eligible for tax and payroll benefits  

  • Small Business Deduction (SBD) – reduced corporate tax rate on active business income  
  • SR&ED refundable investment tax credits  
  • Enhanced capital gains exemptions  
  • Special payroll reporting rules for T4s and RL‑1s  
  • Access to certain provincial credits available only to CCPCs  

Because of these benefits, it’s important to correctly identify your CCPC status when completing year‑end forms.