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Company bookkeeping is ordinary bookkeeping with one difference: a corporation is its own taxpayer, so its books must stand alone. It files a T2 return every year even when it owes nothing, usually electronically for tax years starting after 2023, and the CRA wants the supporting records kept for six years.
Why does a company need separate books?
Because the money in the corporation isn’t yours. Once you incorporate, the company owns the bank account, the sales and the bills. If you pay a personal expense from that account, someone has to record it as something the company gave you. That entry is easy on the day and very hard to reconstruct twelve months later.
Say Marcus, an owner in Saskatoon, pays $500 for a family dinner out of the company account. That’s not a business cost. It has to be recorded as money the company gave him, and an accountant will tell him how it’s treated. If he uses a personal card for it instead, the question never comes up.
So keep a business bank account and a business card, and use them only for the company. It’s the cheapest habit in this whole guide and it saves the most grief.
The CRA also says the responsibility for adequate records is yours, even when a bookkeeper or accountant keeps them. Handing over the shoebox doesn’t hand over the liability.
What records should a corporation keep?
Everything that shows income and expenses: sales invoices, supplier bills, bank and card statements, payroll records, and the minute book for the corporation itself. The CRA’s rule is six years from the end of the last tax year the records relate to, unless it has agreed you can destroy them sooner. Keep them at your Canadian home or business address unless the CRA gave permission for somewhere else. The CRA’s keeping records page for businesses explains where to keep them, for how long, and how to ask permission to destroy them early.
| Record | What it proves |
|---|---|
| Sales invoices and deposit slips | Revenue you report |
| Supplier bills and receipts | Expenses you deduct |
| Bank and card statements | Every movement of money |
| Payroll records | Deductions held back and remitted |
| Year-end schedules | Balance sheet and income statement behind the T2 |
What goes in the minute book?
The minute book is the corporation’s own file, separate from the accounting records. It normally holds the incorporation documents, the bylaws, and the records of who the directors and shareholders are and what they decided. Those decisions matter for the numbers. A dividend, for example, should have a director’s resolution behind it, and the bookkeeper will ask for it.
Your province or the federal government sets the exact list, so check the rules where you incorporated. The point here is simple: if a big decision isn’t written down, the books have nothing to hang the entry on.
How much tax will the books show?
Good books tell you the profit, and the profit tells you the tax. Take a Canadian-controlled private corporation with $150,000 of active business income for a calendar 2026 year. In Ontario the corporate tax calculator gives $17,544, an average of 11.7%, which leaves $132,456 in the company. In British Columbia the same income comes to $16,500, or 11.0%.
The Ontario figure blends the 3.2% and 2.2% small business rates by the days each applied in 2026, as the CRA says to do, and the blend is our own calculation. A company with another year end will get a different result. The calculator also skips credits, associated companies and investment income.
That $132,456 isn’t yours yet. Pulling it out as a dividend brings a second layer of personal tax, which the dividend tax calculator can estimate. Taking it as salary means payroll deductions, and the take-home pay calculator shows those.
What do you record when you pay yourself?
Salary is an expense of the company, and it comes with source deductions that must be remitted to the CRA. The payroll remittance calculator shows both halves of the cost, and our page on hiring and paying staff covers the rest of the payroll side. Dividends aren’t an expense, they come out of profit after tax. Owners mix the two up more than anything else.
Which mix is best depends on your income, your province and your other plans. We won’t give a rule of thumb, because the wrong one costs real money. Ask an accountant to run both in dollars for your case.
What mistakes do owners of new companies make?
The first is leaving the books until the accountant calls. By then you’ve forgotten what half the payments were. Ten minutes a week keeps it fresh.
The second is assuming no profit means no filing. A resident corporation has to file a T2 return every tax year even with no tax payable, and for tax years starting after 2023 it has to file it electronically, with a $1,000 CRA penalty if it doesn’t when it should. We cover the deadlines in our guide to the T2 corporate tax return.
The third is hiring on price alone. We couldn’t confirm typical fees from an official source, so we don’t quote any. Compare what each quote includes: monthly reconciliation, payroll, sales tax returns and the year-end package.
Sources, and how we checked them
The record-keeping rules come from the CRA‘s pages on keeping records, and the T2 filing points from its corporation income tax return page, both read in November 2026. The corporate tax examples use the 2026 rates in our calculator, checked against CRA pages on 29 September 2026. This is an independent guide, separate from any government body.
Frequently asked questions
Does a corporation with no profit still file a T2?
Yes. The CRA says resident corporations, with a few exceptions such as registered charities, must file a T2 return every tax year even when no tax is payable. That includes inactive companies. A quiet year is no reason to skip the return, and an unfiled year is a nuisance to fix later.
How long should a company keep its records?
Six years from the end of the last tax year they relate to, unless the CRA has agreed you can destroy them earlier. Keep them at your Canadian business or home address unless the CRA allows another place. Records of long-term property and share registries can need to be kept longer.
Can I use my personal account for the company?
It makes the books much harder to prove and to sort. Once you incorporate, the company owns the bank account, the sales and the bills, so a personal expense paid from it has to be recorded as money the company gave you. Use a separate business account and card.
Is salary or a dividend better for the owner?
It depends on your income, province and plans. Salary is a company expense with source deductions to remit, while a dividend comes out of profit after tax and brings personal tax on top. We can’t give a general rule, so ask an accountant to compare both in dollars for your case.
Must a corporation file its T2 electronically?
For tax years starting after 2023 most corporations must, with a few listed exceptions such as insurance corporations and non-resident corporations. The CRA charges a $1,000 penalty for a corporation that is required to file electronically and does not. Check the exceptions on the CRA’s corporation income tax return page.
- Self-employed taxes in Canada: income, CPP and GST
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