Advantages of electing under s. 89(11) to not be a CCPC are more achievable if, in the case of a CCPC also holding investments, it transfers its business to a new Opco, which so elects

A Canadian-controlled private corporation (Famco) whose taxable capital exceeds $15 million (so that it cannot enjoy the small business deduction) may wish to elect to cease to be a CCPC in order that it no longer is required to keep track of its general rate income pool (which in low-rate provinces does not reflect the full amount of its actual after-tax full-rate income). However, if it does this directly, it may generate a low rate income pool (generally based on its tax retained earnings in excess of its GRIP at the end of the prior taxation year and its capital dividend account), which must be distributed first before it can distribute eligible dividends to its shareholders.

A better result may be achieved by rolling down its business assets to a new subsidiary (Opco), with Opco (rather than Famco) electing not to be a CCPC. The tax cost of Opco’s assets should be equal to the sum of its debts and the paid-up capital of its shares, so that it should have no starting LRIP balance, nor should it subsequently generate LRIP if it only earns business income.

Accordingly, all the dividends paid by Opco to Famco can be eligible dividends and, as a CCPC, Famco can fully distribute these eligible dividends to its (individual) shareholders. In some provinces, the dividend refund to Famco will exceed their dividend tax.

Neal Armstrong. Summary of John Granelli, "Getting a Handle on GRIP", Tax Topics (Wolters Kluwer), No. 2252, May 7, 2015, p. 1 under s. 89(1) – GRIP.