6 worked Federal Incorporation case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to federal incorporation work, not a specific client's file.
Case Study 1 · Objection and relief
$76,000 Of Penalties And Interest Cancelled On Relief — New Professional Corporation, Mississauga
Client: A professional forming a professional corporation · Where: Mississauga, Ontario · Engagement: 3 weeks, fixed fee
Penalties and interest cancelled$76,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A professional forming a professional corporation, Mississauga, Ontario
An assessment of $76,000 landed at a professional forming a professional corporation in Mississauga, Ontario following a desk review. It turned on a December 31 year-end chosen by default that put the balance due at the worst point in the cash cycle. The auditor had not seen the records behind it.
What we did for A professional forming a professional corporation, Mississauga, Ontario
We selected a year-end that put the balance-due date after the seasonal cash peak, then registered every program account the business actually needed. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A professional forming a professional corporation, Mississauga, Ontario
$76,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 2 · Planning that cut the bill
$71,000 Cut From The Annual Tax Bill — Reviving Corporation, Hamilton
Client: A corporation reviving after administrative dissolution · Where: Hamilton, Ontario · Engagement: 7 weeks, fixed fee
First-year saving$71,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A corporation reviving after administrative dissolution, Hamilton, Ontario
A corporation reviving after administrative dissolution in Hamilton, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly. It still left a spouse added as a shareholder on the assumption dividends could simply be split between two returns on the table.
What we did for A corporation reviving after administrative dissolution, Hamilton, Ontario
We modelled the current position against the alternatives before changing anything. Then we separated the corporate registry deadlines from the CRA deadlines on one calendar, with a named person responsible for each.
The result — A corporation reviving after administrative dissolution, Hamilton, Ontario
The change saved $71,000 in the first year and repeats annually. Nothing about the filings became more aggressive. The position is simply the one the rules already allowed.
Case Study 3 · Sale and succession
Intergenerational Transfer Completed With $680,000 Deferred — Extra-Provincial Registrant, London
Client: An owner registering extra-provincially in a second province · Where: London, Ontario · Engagement: 5 weeks, fixed fee
Tax deferred$680,000
TransferCompleted
RecordsReview-ready
The situation — An owner registering extra-provincially in a second province, London, Ontario
A generational transfer at an owner registering extra-provincially in a second province in London, Ontario had been discussed for years without a plan. Passive assets sitting inside the operating company, disqualifying the shares meant the transfer as contemplated would have been fully taxable.
What we did for An owner registering extra-provincially in a second province, London, Ontario
We opened the register of individuals with significant control and put its review on the same annual cycle as the corporate annual return. We sequenced the steps so each one was complete and documented before the next depended on it.
The result — An owner registering extra-provincially in a second province, London, Ontario
$680,000 of tax was deferred through the transfer, and the successor generation took over a corporation whose records stood up to review.
Client: A trades business incorporating provincially · Where: Kitchener, Ontario · Engagement: 6 weeks, fixed fee
Penalty cancelled$19,500
Relief applicationGranted
ReturnAccepted as filed
The situation — A trades business incorporating provincially, Kitchener, Ontario
A trades business incorporating provincially in Kitchener, Ontario had already missed one deadline and was about to miss a second. Behind it sat a register of individuals with significant control that had never been opened, let alone updated. A penalty of $19,500 was accruing.
What we did for A trades business incorporating provincially, Kitchener, Ontario
We split the work into what had to happen before the deadline and what could follow it. Then we restructured the share capital so dividends could be directed deliberately, respecting the TOSI rules.
The result — A trades business incorporating provincially, Kitchener, Ontario
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $19,500 of the penalty already assessed on the earlier year.
Case Study 5 · Scaling without breaking
Second-Province Expansion Handled, $110,000 Of Cash Released — Pre-Investment Startup, Moncton
Client: A startup preparing for its first investment round · Where: Moncton, New Brunswick · Engagement: 11 weeks, fixed fee
Cash released$110,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A startup preparing for its first investment round, Moncton, New Brunswick
Revenue at a startup preparing for its first investment round in Moncton, New Brunswick was up sharply and cash was tighter than ever. Underneath it sat a single class of common shares that made income splitting impossible.
What we did for A startup preparing for its first investment round, Moncton, New Brunswick
We reconstructed the minute book with resolutions for each historical dividend and share transaction. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A startup preparing for its first investment round, Moncton, New Brunswick
$110,000 of cash was released from the working capital cycle. The expansion completed with every registration and filing obligation covered from day one.
Case Study 6 · Backlog brought current
6 Years Filed, $11,000 Removed From The Assessed Balance — New Program Registrant, Lethbridge
Client: A corporation registering its CRA program accounts · Where: Lethbridge, Alberta · Engagement: 4 weeks, fixed fee
Years filed6
Assessed balance removed$11,000
CollectionsStopped
The situation — A corporation registering its CRA program accounts, Lethbridge, Alberta
A corporation registering its CRA program accounts in Lethbridge, Alberta had not filed for 6 years. The CRA had issued arbitrary assessments. The business was carrying a registered office address left unchanged through two moves, so registry notices went to an empty unit. That came on top of a growing interest balance.
What we did for A corporation registering its CRA program accounts, Lethbridge, Alberta
We started with the oldest year and worked forward so each year's closing balances fed the next. We revived the corporation, filed the outstanding annual returns, and set a compliance calendar covering both the corporate registry and the CRA. We filed the years in sequence rather than all at once.
The result — A corporation registering its CRA program accounts, Lethbridge, Alberta
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $11,000 of the estimated balance came off, with a payment arrangement covering the rest.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
