Shareholder loan

Definition

A loan from a shareholder to their corporation (or vice versa). Under ITA 15(2), an unpaid loan from the corporation to the shareholder is added to the shareholder's income if not repaid within one fiscal year.

Long reference

Handbook

Shareholder Loans (ITA 15(2))

Citations, procedures, and worked examples for shareholder loan.

Related terms

Salary vs dividends

The choice every 1-person corp owner makes: pay yourself via a T4 salary (creates RRSP room, CPP) or non-eligible dividend (no payroll admin, no CPP).

All terms More in Corporate tax