A corporation exists as a distinct legal entity (it is legally separate from its shareholder or shareholders). As a rule, a corporation continues to exist until it is dissolved.

A corporation can be constituted under a provincial or federal law, in particular the:

  • Companies Act
  • Business Corporations Act
  • Canada Business Corporations Act

The goal of a corporation is to operate a business for profit and to distribute the profits (in the form of dividends) among the shareholders.

Tax obligations of corporations

Income tax 

A corporation must file an income tax return and meet other obligations.

For more information about the special tax obligations of corporations, click Income Tax – Corporations.

If you administer an incorporated non-profit organization, click Income Tax – Non-Profit Organizations.

Tax measures for certain activities

Depending on a corporation's sector of activity, it may be subject to additional tax measures. This is the case, for example, if a corporation:

  • operates one or more mines;
  • carries out logging operations;
  • operates an electric power system, a gas distribution system, or a telecommunications system; or
  • issues flow-through shares.

For more information, click Sector-Specific Measures.

Consumption taxes

As a rule, corporations are subject to the rules regarding the application of the GST/HST and QST.

For more information on the tax obligations of corporations, click Consumption Taxes.

Source deductions and contributions

A corporation must make source deductions and pay contributions on any amounts it pays to an employee or beneficiary, provided any of the basic conditions are met.

For more information about the obligations and responsibilities of corporations as employers or payers, click Source Deductions and Contributions.

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