The link above to "I am a Contractor Unless the CRA Says Otherwise" is now almost four and a half years old. Thus, the court provided for the possibility a shareholder could be an independent contractor to their own company in certain circumstances. to apportion the amounts paid between the services performed in one capacity and the other." It follows that the simple fact that an individual is a director or an officer of a company does not, in and of itself, exclude the possibility that other services may be provided by that individual as an independent contractor. "It would also seem to me that, while this would be unusual, an individual could enter into more than one contract with his or her own company and therefore could provide services in different capacities. However, Justice Webb made an important comment in respect of whether a shareholder can be a contractor to their own company. This ruling was founded in part on the finding that there was no contract between Pluri Vox and the shareholder and that the shareholder did not invoice Pluri Vox for his services and did not charge GST (despite being registered for GST with the CRA). As a result of this, the company was liable for payroll source deductions that were not remitted in the past. Nonetheless, the court ruled the shareholder's status to be that of an employee. The shareholder was not directed on how to perform his duties and was able to hire assistants without Pluri Vox’s consent. The company asserted that the varying compensation was indicative of the financial risk the shareholder undertook.ģ. He was not paid a predetermined salary, but was paid a fee between $3,000 and $8,000 per month based on the commercial activity Pluri Vox undertook.Ģ. In the 2012 court case, Pluri Vox Media Corp.v The Queen, 2012 FCA 295, the sole shareholder of Pluri Vox took the position that he was an independent contractor (not an employee) to his own company for the following reasons:ġ. However, how about the situation where a shareholder of a corporation (whom you would typically consider to be an employee) wishes to treat themselves as an independent contractor and pay themselves a consulting/management fee instead of a salary? As I have been asked this question several times by readers, today, I will discuss a 2012 court case that "sort of" addressed the issue. I have discussed these controversial income tax issues a couple of times in “I am a Contractor Unless the CRA Says Otherwise” and in “Is Your Corporation a Personal Service Business”.
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