No
Not in the act, not supported by contracr, no basis.
Thanks Joe, the dilemma here is that I handle the bookkeeping of these 4 companies :(. They are small entities but I would really like to do it the proper way. Co. A owned 100% by 1 person and this single person owns 50% of Co. B/C/D. I was also inclined to prepare an agent relationship however I am still looking for a relevant template that would guide me in creating one so I can fully justify it as per @tsolowczuk advise.
If the director wants to get himself into trouble, he should proceed the way he is doing it.
If he doesnât want to get into trouble, consulting with the relevant corporate CPAs and lawyers would help.
(Eg potential directors liability for payroll, gst etc as mentioned by others above)
Lots of potential traps in multi-corp situationsâŚ
1 Like
Thanks Joe. I was thinking could it be a lot easier if Co. A did not register at all with HST because it is not an income generating entity. If that would resolve this problem, I might propose to deregister the HST after a year.
Form the scant outline, it seems unlikely that any of the 4 corporations would escape being forced to be a GST/HST Registrant under the ETA, (eg refer section 2, section 148 etc of the ETA, and S256 of the ITA to check that out) since it appears that they are likely related and associated. So to have ANY of them deregistered may be an issue, and attract liability to the director(s) personally.
(Also, the business purpose of Corp A being a ânot-for-profitâ could potentially raise a bucket of new issuesâŚ)
Itâs not really a matter of which may be âeasier bookkeepingâ, but rather its a mandatory matter of ensuring that ALL 4 of the corporations (and their directors) are compliant with the Law (ETA as well as the ITA) as a fundamental starting point.
1 Like