The shareholder loan trap: What to do when you owe your company too much

If you own a corporation, your company’s books show a number you should know: your shareholder loan balance. When that number says you owe the company money (a “shareholder debit”), CRA starts a clock. If you let it run out, the full amount can be taxed as regular income (at rates of up to 53% in Ontario) and you still owe the money back.
In this Office Hours with George session, I explain what a shareholder debit is, how it builds up without anyone noticing, and why the usual quick fixes often make it worse. Then we walk through the ways out:

  • paying yourself properly
  • tax-free accounts your company may already have
  • moving assets into the company, and
  • changing how cash flows

Watch the recording below to learn more about shareholder debits, and then make the time to see what your shareholder debit balance is – in case you need to make a plan with your accountant.

Resources

More questions?

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Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.