How To Choose Your Canadian Tax Program: Difference between revisions

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Revision as of 03:56, 8 October 2026

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The most typical form of legal entity is this company. There are two basic forms, C Corp and S Corp. A C Corp pays tax based on its profit for all seasons and then any dividends paid to shareholders one more taxed. Hence the term double-taxation. An S Corp however works differently. The S Corp pays no tax on profits. The gain flows to the shareholders who then pay tax on that money. The big difference here is that the 15.3% self-employment tax does not apply.

So, by forming an S Corporation, business saves $3,060 for 2011 on transfer pricing a nice gain of $20,000.

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