What is Planning for Business Owners & Incorporated Professionals?

Planning for incorporated Canadians coordinates how income is taken from the corporation, how capital is invested inside it, and how wealth moves between corporate and personal structures — designed as a system, not isolated tax decisions.

Key Corporate Planning Decisions

Salary vs dividends

  • Coordinate RRSP room and CPP
  • Match income needs to strategy
  • Avoid tax-only decisions

Corporate capital planning

  • Define the purpose of surplus
  • Set an investment policy
  • Manage business risk

Holding company structures

  • Separate operating risk
  • Keep implementation clean
  • Align with long-term plan

Liquidity planning

  • Plan before the transaction
  • Model after-tax proceeds
  • Integrate corporate + personal outcomes

FAQ

Is it better to pay myself salary or dividends in Canada?
It depends on income needs, RRSP goals, CPP participation, and how much you intend to retain in the corporation. The best approach is a coordinated compensation strategy.
When should I set up a holding company in Canada?
A HoldCo can help separate risk and organize surplus capital, but it is only worth it when the legal structure and implementation hygiene support the plan.
How much money should I keep inside my corporation?
There is no single threshold. The right amount depends on business risk, reinvestment plans, and personal draw strategy. Planning clarifies the role corporate capital plays.
What is a liquidity event and how should I plan for it?
A liquidity event converts business value into cash (sale, recapitalization, major dividend). Plan before the transaction so tax structure and post-sale investing work together.
Do I need a buy-sell agreement as a business owner?
If there are multiple shareholders, a buy-sell agreement is often essential. It clarifies what happens on death, disability, or departure and coordinates funding so decisions are executable.