What is a CCPC?

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.