Frequently Asked Questions | Corporate Investing & Tax Strategies

Corporate investing operates under different tax rules than personal investing. Key differences include:

• Tax rates: Corporate tax rates differ from personal tax rates, and the type of income (interest, dividends, capital gains) matters more
• Tax mechanisms: Corporations have access to mechanisms like RDTOH, GRIP, and CDA that don't exist for personal accounts
• Integration: Corporate income is eventually taxed at the personal level when dividends are paid, creating an integrated tax system
• Constraints: Rules like the SBD "grind" can affect corporate tax rates based on passive investment income
• Structures: Corporate-class funds and other tax-efficient structures are designed specifically for corporate accounts

For more detail, see our article on The SBD "Grind" & Your Corporate Portfolio.

We work with corporations of various sizes. While there's no strict minimum, our approach is most effective for corporations with:

• Surplus cash of $100,000 or more available for investment
• Ongoing business operations generating consistent income
• A long-term perspective (5+ years) for wealth building

If your corporation has less than $100,000 in surplus, we can still provide guidance on structure and strategy, even if full portfolio management may not be appropriate yet. The key is having a plan that scales as your business grows.

Yes, we work with incorporated business owners in both Québec and Ontario. While tax rates and some rules vary by province, the core principles of corporate investing and tax optimization apply across both provinces.

We're licensed in both provinces and understand the provincial variations in:

• Corporate tax rates (small business and general rates)
• Personal tax rates and dividend tax credits
• Provincial tax integration
• Estate planning considerations

See our Montréal and Toronto pages for more information about serving each region.

Corporate accounts can hold a wide range of investments, including:

• Mutual funds: Including corporate-class funds designed for tax efficiency
• ETFs: Exchange-traded funds for diversification
• GICs and fixed income: For capital preservation and liquidity
• Stocks and bonds: Individual securities (depending on account type)
• Alternative investments: Depending on your risk tolerance and objectives

The key is structuring the portfolio to optimize for corporate tax considerations—favoring capital gains, using corporate-class funds, and managing income types to minimize tax drag.

Mutual funds are offered through WhiteHaven Securities Inc. Other investment products may be available depending on your account type and objectives.

The SBD (Small Business Deduction) "grind" is a tax mechanism that reduces your small business deduction when your corporation earns passive investment income above $50,000. For every $1 of passive income above $50,000, you lose $5 of small business deduction.

This can increase your corporate tax rate from the small business rate (~12-15%) to the general rate (~26-27%) on active business income, creating significant tax drag.

Strategic portfolio design—focusing on capital gains (only 50% counts toward the grind), using corporate-class funds, and managing income types—can help minimize the grind's impact while still growing wealth.

For a detailed explanation, see our article on The SBD "Grind" & Your Corporate Portfolio.

RDTOH (Refundable Dividend Tax on Hand) is a refundable tax account that tracks taxes paid on passive investment income. When you pay eligible dividends, you can receive a refund of some of these taxes, effectively reducing the corporate tax rate on passive income.

GRIP (General Rate Income Pool) tracks income taxed at the general corporate rate (not the small business rate). Income in the GRIP allows you to pay "eligible dividends" that qualify for enhanced personal tax credits, resulting in lower total tax.

Understanding these mechanisms helps you optimize dividend timing and type to minimize total tax across corporate and personal levels.

For more detail, see our article on RDTOH & GRIP for Owner-Managed Corporations.

The CDA is a notional account that tracks tax-free amounts available to be paid as capital dividends. When capital dividends are paid from the CDA, they are received tax-free by shareholders, making this one of the most powerful tax-sheltering tools for corporations.

The CDA increases when your corporation:

• Realizes capital gains (50% of the gain is added)
• Receives life insurance proceeds (net of adjusted cost base)
• Receives capital dividends from other corporations

This allows you to extract corporate wealth tax-free, which is particularly valuable for estate planning and wealth transfer.

For a comprehensive guide, see our article on CDA 101: The Capital Dividend Account Explained.

Yes, absolutely. We regularly coordinate with clients' existing professional teams, including CPAs, lawyers, and notaries. This coordination is essential because:

• Tax strategies must align with your CPA's tax planning
• Estate planning structures (trusts, estate freezes) require legal input
• Corporate structures (HoldCo/OpCo) need both tax and legal coordination
• Insurance planning must integrate with estate and tax plans

We work as part of your professional team, not as a replacement. We provide investment and insurance expertise while your CPA handles tax compliance and your lawyer handles legal structures. The key is ensuring everything works together.

Many of our clients appreciate this collaborative approach, as it ensures all aspects of their wealth strategy are aligned.

Life insurance can play several important roles in corporate tax planning:

• CDA building: Life insurance proceeds received by a corporation are added to the CDA, allowing tax-free extraction of wealth
• Estate liquidity: Provides tax-free funds to pay estate taxes and other obligations
• Buy-sell funding: Funds buy-sell agreements for business succession
• Key person protection: Protects the business from the financial impact of losing a key person
• Tax-sheltered growth: Permanent life insurance can grow tax-sheltered within the policy

Insurance products are provided through iAssure Inc. We work with multiple insurers to find the best fit for your situation.

See our Life Insurance for Business Owners page for more information.

Yes, we're independent and work with multiple major life insurance companies. This allows us to:

• Compare products: Evaluate policies from different insurers to find the best fit
• Optimize pricing: Find competitive rates and terms
• Match features: Select policies with features that match your specific needs
• Provide objective advice: Recommend products based on merit, not manufacturer

We're brand-agnostic, which means we focus on what's best for you, not what's best for any particular insurer.

Our process typically follows these steps:

1. Initial consultation: We start with a 15-minute intro call to understand your situation and see if there's a fit
2. Discovery: If we proceed, we gather information about your corporation, goals, current situation, and constraints
3. Analysis: We analyze your situation, identify opportunities, and develop recommendations
4. Recommendation: We present our recommendations with clear explanations and rationale
5. Implementation: We help you implement the chosen strategies
6. Ongoing review: We provide regular reviews and adjustments as your situation changes

Throughout the process, we coordinate with your existing professionals (CPA, lawyer) to ensure everything aligns.

For more detail, see our How We Work page.

Our fee structure depends on the services provided:

• Investment management: Fees are typically based on assets under management, with rates that may vary based on account size and services
• Insurance: Commission-based (paid by the insurance company, not by you)
• Consultation: Some consultation services may be fee-based

We believe in fee transparency. We'll discuss fees clearly before you commit to any service, and we'll explain how fees are calculated and what's included.

Fees are always disclosed in writing before implementation, and we're happy to answer any questions about our fee structure.

For a detailed discussion of fees, please contact us for a personalized conversation.

Review frequency depends on your needs and preferences, but typically:

• Portfolio reviews: Quarterly or semi-annually for most clients
• Strategy reviews: Annually, or when significant changes occur (business changes, tax law changes, life events)
• Ad-hoc reviews: Available whenever you have questions or concerns

We believe in regular, structured reviews to ensure your strategy stays aligned with your goals and circumstances. However, we also respect your time and won't over-schedule meetings.

The review process includes discussing performance, reviewing goals, identifying changes, and making adjustments as needed.

We're independent and brand-agnostic. This means:

• Product selection: We can recommend products from multiple manufacturers, not just one
• Objective advice: We're not incentivized to push specific products
• Best fit: We focus on finding the best solutions for your situation, regardless of manufacturer

Mutual funds are offered through WhiteHaven Securities Inc., which provides access to a broad range of fund families, not just proprietary products.

Insurance products are provided through iAssure Inc., and we work with multiple major insurers to find the best fit.

This independence allows us to provide objective, client-focused advice rather than product-focused sales.

For an initial 15-minute intro call, you don't need to provide detailed information. We'll discuss:

• Your corporation's situation (industry, size, structure)
• Your goals and concerns
• What you're hoping to achieve
• Whether there's a fit for working together

If we decide to proceed, we'll gather more detailed information, which may include:

• Corporate financial statements
• Current investment statements
• Tax returns (if relevant)
• Insurance policies (if reviewing insurance)
• Information about your professional team (CPA, lawyer)

We'll let you know exactly what we need and why, and we'll work with you to gather it efficiently.

This website and its content are educational and illustrative only. They explain general concepts and strategies that may apply to incorporated business owners, but they are not personalized investment, tax, or legal advice.

Personalized advice requires:

• A formal engagement and relationship
• Understanding your specific situation (KYC - Know Your Client)
• Suitability assessment based on your circumstances
• Coordination with your professional team

If you'd like to discuss how these concepts might apply to your specific situation, please book a consultation.

The best way to get started is to:

1. Download our Playbook: Get our free "Owner's Tax-Smart Investing Playbook" to understand our approach and key concepts
2. Book a 15-minute intro call: Schedule a brief conversation to discuss your situation and see if there's a fit
3. Explore our articles: Read our educational guides to learn more about corporate investing and tax strategies

There's no obligation, and we'll help you understand whether we can add value to your situation.

Download the Playbook or book a call to get started.