Annual resolutions often include resolutions that extract funds from the corporation to the shareholders personally.
These resolutions may declare capital dividends from the non-taxable portion of a corporation’s capital dividend account (CDA). They may declare eligible dividends extracted from a corporations General Rate Income Pool (GRIP). Or, they may declare non-eligible dividends drawn from the corporation’s Low Rate Income Pool (LRIP), which are the most common form of dividends for businesses subject to the Small Business Deduction (SBD). Resolutions can also declare share redemptions (taxed as deemed dividends), management bonuses, and other forms of year-end resolutions in order to extract retained earnings from the corporation in the most tax efficient manner.