Lines 040 and 043 - Type of corporation at the end of the tax year

Lines 040 and 043 - Type of corporation at the end of the tax year

Line 040

Tick the box that describes the corporation type at the end of the tax year. The corporation type determines whether or not the corporation is entitled to certain rates and deductions. See the following for details.

Reference
IT-391, Status of Corporations

Box 1 - Canadian-controlled private corporation (CCPC)

The corporation is a CCPC if it meets all of the following requirements at the end of the tax year:

• it is a private corporation

• it is a corporation that was resident in Canada and was either incorporated in Canada or resident in Canada from June 18, 1971, to the end of the tax year

• it is not controlled directly or indirectly by one or more non-resident persons

• it is not controlled directly or indirectly by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700)

• it is not controlled by a Canadian resident corporation that lists its shares on a designated stock exchange outside of Canada

• it is not controlled directly or indirectly by any combination of persons described in the three previous conditions

• if all of its shares that are owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation with a class of shares listed on a designated stock exchange were owned by one person, that person would not own sufficient shares to control the corporation

• no class of its shares of capital stock is listed on a designated stock exchange

  Note
  A CCPC that has elected under subsection 89(11) not to be a CCPC for certain purposes should tick box 1 when filling line 040.

References
Subsections 89(1), 89(11), 89(12), and 125(7)
IT-458, Canadian-Controlled Private Corporation

Box 2 - Other private corporation

The corporation is an other private corporation if it meets all of the following requirements at the end of the tax year:

• it is resident in Canada

• it is not a public corporation

• it is not controlled by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700)

• it is not controlled by one or more prescribed federal Crown corporations (as defined in Regulation 7100)

• it is not controlled by any combination of corporations described in the two previous conditions

For information about substantive CCPCs, see line 290 on page 40.

References
Subsection 89(1)
Regulations 6700 and 7100

Box 3 - Public corporation

The corporation is a public corporation if it is resident in Canada and meets either of the following requirements at the end of the tax year:

• it has a class of shares listed on a designated Canadian stock exchange

• it has elected, or the minister of National Revenue has designated it, to be a public corporation and the corporation has complied with prescribed conditions under Regulation 4800(1) on the number of its shareholders, the dispersing of the ownership of its shares, the public trading of its shares, and the size of the corporation

If a public corporation has complied with certain prescribed conditions under Regulation 4800(2), it can elect, or the minister of National Revenue can designate it, not to be a public corporation.

References
Subsections 89(1) and 248(1)
Regulations 4800(1) and 4800(2)

Box 4 - Corporation controlled by a public corporation

The corporation is a corporation controlled by a public corporation if it is a Canadian subsidiary of a public corporation. This type of corporation does not qualify as a public corporation for determining the type of corporation.

Box 5 - Other corporation

The corporation is an other corporation if it does not fall within the other categories. Examples of other corporations include general insurers and Crown corporations.

Line 043 - If the type of corporation changed during the tax year, provide the effective date of the change

Indicate the effective date of the change. Do not include other types of changes in this section, such as the change from active to inactive status.

A change of corporation type may bring significant tax consequences. For example, certain calculations on the return depend on whether the corporation was a private corporation or a CCPC throughout the tax year, at any time in the tax year, or at the end of the tax year.

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