Type of corporation

There are different types of corporations for tax purposes, and you have to select the one that accurately describes your corporation type at the end of the tax year. The corporation type determines whether or not the corporation is entitled to certain rates and deductions. Make sure you know which type applies to you:

A change of corporation type may result in significant tax consequences. For example, certain calculations on the return depend on whether the corporation was a private corporation or a Canadian-controlled private corporation (CCPC) throughout the tax year, at any time in the tax year, or at the end of the tax year.

Canadian-controlled private corporation (CCPC)

The corporation is a CCPC if it meets all of the following requirements at the end of the tax year:

Note

A CCPC that has elected under subsection 89(11) not to be a CCPC for certain purposes should tick box 1 when filling line 040.

Other private corporation

The corporation is an other private corporation if it meets all of the following requirements at the end of the tax year:

Public corporation

The corporation is a public corporation if it is resident in Canada and meets either of the following requirements at the end of the tax year:

If a public corporation has complied with certain prescribed conditions under Regulation 4800(2), it can elect, or the minister of National Revenue can designate it, not to be a public corporation.

Corporation controlled by a public corporation

The corporation is a corporation controlled by a public corporation if it is a Canadian subsidiary of a public corporation. This type of corporation does not qualify as a public corporation for the purpose of determining the type of corporation when completing your T2 Corporation Income Tax Return.

Other corporation

The corporation is an other corporation if it does not fall within the other categories.

Examples of other corporations include general insurers and Crown corporations.

Note

Credit unions and cooperative corporations should tick box 1 at line 040 when preparing their T2 return if they meet the definition of a Canadian-controlled private corporation under subsection 125(7) (without reference to subsections 137(7) or 136(1) respectively).

Forms and publications

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: