Manual document handling might be a reason for your enterprise burning off funds and your employees losing interest in their responsibilities. The simplest way to increase all business procedures and enhance your stats is to take care of everything with cutting-edge software like DocHub. Handle all your files and Save Shareholder Loan in PPR within seconds and save more time for pertinent tasks.
With DocHub, you have limitless use of your files and Templates available to you at any moment. Explore all features today with the free of charge DocHub account.
David Rock, a Canadian tax and business lawyer, discusses the taxation of shareholder loans in a tutorial. A shareholder loan, or draw, is money withdrawn by a shareholder from a corporation. If this amount isn't reported as income, it allows for tax-free money extraction. According to the Canadian Income Tax Act, specifically Subsection 15(2), any shareholder loan not repaid within two corporate year-ends becomes fully taxable at top marginal rates. Thus, shareholders can take draws but must ensure repayment within two years. If not repaid, the amounts must be classified as either dividends or salaries, leading to tax implications for the shareholder and providing the corporation with deductions for salaries paid or reductions in retained earnings for dividends issued.