Check shareholder information before a Canadian T2 filing

CRA says private corporations must complete Schedule 50 for shareholders holding 10% or more of common and/or preferred shares. The T2 guide instructs filers to provide a maximum of the ten top shareholders. Have the preparer confirm the corporation's status and the relevant shareholder population before assuming that a standard investor list is the filing schedule.

Start with the legally maintained shareholder records and executed changes for the tax year. Identify the company and year-end clearly. A fundraising presentation may include options, convertible instruments or proposed issuances that have not become issued shares. Keep those items visible for review without silently including them in the same ownership denominator.

Obtain the rights attached to each class, including common or preferred classification and votes per share. The form labels its percentage fields for common and preferred shares, while the T2 guide specifically notes that lines 400 and 500 refer to percentages of votes. Give both the class quantities and voting rights to the preparer so the reported percentages follow the instructions.

Do not substitute percentage of invested dollars, fully diluted ownership or economic entitlement. Those measures can differ, especially when classes have different votes or redemption rights. Ask for an explicit calculation where the capital structure is unusual. A spreadsheet column headed ownership is not sufficient evidence of the basis used for the tax disclosure.

Record whether each shareholder is an individual, corporation, partnership or trust, as the form requests. Match the name to the share register and relevant legal documents. Distinguish a beneficial-owner summary from the legal holding record and have nominee or trust arrangements assessed rather than replacing one with the other informally.

Collect the applicable identifier through the company's established tax-document process. The form calls for one identifier per shareholder, using the field appropriate to the holder type. Do not place a trading name or contact person's details into a field merely because those are the only details readily available in the investor-relations system.

List issuances, transfers, redemptions and conversions with their effective dates and executed support. Flag transactions agreed before year-end but completed afterward. Ask the preparer to determine how the actual timing affects the schedule instead of using the date an administrator last edited the cap table.

Keep threshold calculations reproducible. For a simple single-vote common class, 120 of 1,000 issued voting shares represents 12%; that illustration does not answer a multiple-class case. Retain the denominator, included holdings and rounding method with the approved calculation. Investigate any difference from the prior filing rather than copying the new percentage without explanation.

Give the authorized corporate-record owner the names and holdings to confirm, and have the tax preparer approve the filing treatment. Preserve unresolved identity or voting-right questions before submission. Save the final Schedule 50 with its calculation and source-date record, so next year's review begins from an explained disclosure instead of an unexplained list of percentages.