The owner planning guide

1. What should the corporation keep accessible?

Before any money is called long-term, the business needs cash for payroll, tax instalments, seasonal swings, holdbacks and a buffer for a bad year. Only what is left after that is genuinely surplus. Investment income on surplus is taxed at about 50% inside an Ontario corporation, part of it refundable when dividends are paid, and above $50,000 a year it begins to reduce the small business limit. See the passive income cost.

2. What would your estate need, and is the cash there?

At death, you are generally treated as having sold capital property, including private company shares, at fair market value. Registered plans are generally taxed as income unless they roll to a spouse or other eligible beneficiary. Ontario charges Estate Administration Tax on assets passing through an estate certificate. Add any debts or guarantees, and compare the total with cash, other liquid assets and existing coverage. Check estate liquidity.

3. How does the value transfer?

With partners, a written buy-sell or shareholder agreement says who buys a departing owner’s share, at what value, and how it is paid. With family, succession can involve an estate freeze, the lifetime capital gains exemption if shares qualify, or a gradual sale. Your lawyer and accountant design these; we help make sure the funding matches. Check buy-sell funding · Check key-person exposure.

Funding a gap: insurance and other options

A gap can be closed in several ways: holding more liquid assets, credit capacity, instalment terms, staged sales, or insurance. Insurance can provide cash at the moment it is needed, but it has a cost, requires underwriting, and some policy values are not guaranteed. We compare options across several insurers and show guaranteed and non-guaranteed elements separately. When an estimate shows no funding gap, we say so; whether existing coverage is suitable is a separate question for a review.

What to bring to a review

• Latest corporate financial statements and a rough split of cash you need accessible
• Your accountant’s estimate of share value and cost base, if you have one
• Any shareholder or buy-sell agreement, and your will’s general structure (no need to share private details in advance)
• Existing personal and corporate insurance summaries
• Major loans and any personal guarantees

By business type

• Incorporated physicians and dentists
• Professional-service firms
• Incorporated trades and owner-operated companies
• Real-estate holding companies

Reviewed November 7, 2026. General education only, not tax, legal or insurance advice.