Corporations: shareholder loans
What the shareholder loan account is, the rule that can turn money you took out into taxable income, and the card that tells you when to repay.
The shareholder loan account tracks money moving between you and your corporation that isn't salary or dividends.
Money you put in
If you pay a business cost with your personal card, or lend the corporation money, the corporation owes you. It can pay you back later without tax, because it is your own money coming back.
Money you take out
If you take money out, or the corporation pays a personal cost for you, you owe the corporation.
The catch: under subsection 15(2) of the Income Tax Act, a loan from your corporation is generally added to your personal income if it isn't repaid within one year after the end of the corporation's tax year in which you took it. For a December 31 year end, money taken in 2026 must be repaid by December 31, 2027. There are a few exceptions, repeated borrow-and-repay patterns don't count as repaid, and a low-interest loan can also be a taxable benefit.
Keep it clean
- Pay personal costs from a personal account.
- Write down each time you put money in or take it out.
- Settle the balance before the deadline, by repaying it or by declaring salary or a dividend.
In CollabNorth
Record money between you and the corporation on the Balance sheet page, under Money between you and the business: You put money in, You took money out, or You paid a business cost yourself. A dividend declared to settle what you owe is Declared a dividend to your shareholder loan. Set the starting amount in your opening balances.
The shareholder loan card on Tax time and on the T2 worksheet shows:
- Who owes whom today.
- If you owe the corporation, how much you took in each tax year and the date each part must be repaid by. Repayments count against the oldest amount first.
- A warning when a repay-by date or your year end is less than 90 days away, and when a date has passed.
On the GIFI balance sheet, money the corporation owes you is 2780 (due to individual shareholder) and money you owe it is 1300 (due from individual shareholder).
This is general information to help you keep your own records. It is not tax or legal advice.
Based on: CRA guide T4012, T2 Corporation Income Tax Guide
Last checked: 2026-10-13