Your corporation is accumulating cash. The next decision matters.
Keeping capital inside a corporation can support working capital, business projects and financial security. When cash becomes structurally surplus, the owner needs to decide what should remain liquid, what can be invested and how that capital fits retirement and succession.
Separate working capital from true surplus
Before investing, protect payroll, taxes, seasonality, debt, acquisitions and contingencies. Surplus capital is what remains after an appropriate operating reserve has been established.
Passive investments and the small-business limit
For a CCPC and associated corporations, the business limit can be reduced when combined adjusted aggregate investment income is between $50,000 and $150,000. The business limit is nil above $150,000. The calculation should be monitored with your accountant.
Invest, protect or prepare the exit
Depending on the horizon, surplus capital may support investments, certain insurance strategies, retirement, an acquisition, succession or future distributions to the owner.
Opco, Holdco and coordination
A holding company can sometimes play a role, but it is not an automatic solution. Any reorganization should be reviewed by the appropriate tax and legal professionals.
See your situation as a whole.
The Protection & Wealth Assessment helps organize the important pieces before a deeper conversation.
Related guides
Frequently asked questions
Not necessarily. The problem is not cash itself but the absence of a clear purpose coordinated with business needs, investments, retirement and tax planning.
No. It refers to adjusted aggregate investment income, not simply the market value of corporate investments.
Not automatically. A Holdco may be useful in some structures, but its costs, objectives and consequences should be reviewed before reorganizing.
For tax or regulatory details, also consult government sources and validate your situation with the appropriate professionals.
How we work
We first understand your situation before recommending a solution. When tax, legal or accounting questions require specialized advice, we coordinate with the appropriate professionals.