Hi everyone,
If there are 2 shareholder in the company (spousal relationship), and the % of ownership is 95% and 5%. Could the spouse who owns 5% ownership take more cash dividends at year end? For example, dividend declared for the year is $90k, could the spouse who owns 5% ownership take $60k?
Only if they have different classes of voting common shares. You could do this if the husband has 95 class A common shares and the wife has 5 class B common shares.
Make sure they aren’t TOSI dividends!
Dividends by law are based STRICTLY on share ownership. If you wish to organize people to get different levels of dividends in a corporation…all other things being equal…it is best to organize a share structure that permits this: ie multiple classes of shares, be they voting or non-voting, each class being held entirely by one individual.
What you have suggested accords neither with the Business Corporations Act (in any province of jurisdiction AFAIK), nor does it accord with the ITA which requires dividends to be paid in a legal manner.
No. As @SmallBizGuy mentioned, a dividend is declared on a class of shares in its entirety and is prorated based on the portion of equity as held by each individual shareholder.