[Verse 1] When benefits flow to shareholders, the question we must ask Was it given by reason of their shares, or for some other task? The founder-operator wears so many hats each day Employee, officer, and owner too - which role led the way? [Chorus] By reason of shareholding, that's the test we need Not employee compensation, not operational deed The CRA must prove causation, isolate the chain When genuine business purpose shows, their case goes down the drain [Verse 2] A sole founder makes decisions in multiple roles at once The same person, different capacities - courts won't play that hunts If the arrangement serves the business, has operational aim The shareholding causation breaks, disrupting CRA's claim [Chorus] By reason of shareholding, that's the test we need Not employee compensation, not operational deed The CRA must prove causation, isolate the chain When genuine business purpose shows, their case goes down the drain [Bridge] Search CanLII for the cases, section fifteen benefit Owner-manager operational, where courts have made their split Tax Court precedents are clear, actual proof required Shareholding must be the reason, or the case gets fired [Verse 3] The analytical question haunts every founder's mind Can causation be isolated when roles are intertwined? Courts demand the Crown demonstrate the benefit's true source Operational purposes can change the legal course [Chorus] By reason of shareholding, that's the test we need Not employee compensation, not operational deed The CRA must prove causation, isolate the chain When genuine business purpose shows, their case goes down the drain [Outro] Multiple hats, one person's head Causation's what the law has said By reason of those shares you hold Or business purpose takes control
← 1 How s. 15 Differs from s. 6 | 3 The Arm's-Length Comparator Problem →