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Corporation a Is a Canadian Controlled Private Corporation and Corporation

Question 3

Multiple Choice

Corporation A is a Canadian controlled private corporation and Corporation B is a public Canadian corporation. Both corporations have a paid-up capital balance of $25,000. Which of these statements is TRUE, provided the proper legal steps are

A) If the private corporation makes a payment of $25,000 to its shareholders by reducing its paid-up capital, there will be no tax consequence for the shareholders.followed?
B) If the private corporation makes a payment of $25,000 to its shareholders by reducing its paid-up capital, only 50% of the payment will be taxable.
C) If the public corporation makes a payment of $25,000 to its shareholders by reducing its paid-up capital, there will be no tax consequence for the shareholders.
D) If the public corporation makes a payment of $25,000 to its shareholders by reducing its paid-up capital, only 50% of the payment will be taxable.

Correct Answer: