CRA confirms that, where all shareholders of a private corporation are directors, an eligible dividend designation can be made through the dividend declaration

CRA essentially repeated its position in 2009-0347491C6 that examples of a valid eligible dividend designation by private corporation include identifying eligible dividends through letters to shareholders and dividend cheque stubs, or where all of the shareholders are directors of a corporation, a notation in the Minutes. CRA elaborated on this “notation in the minutes” method as follows:

Thus, where all of the shareholders are also directors of the corporation, we consider that a directors’ resolution declaring a dividend and containing a designation that such dividend is an eligible dividend constitutes valid notification in writing for the purposes of subsection 89(14).

Neal Armstrong. Summary of 3 December 2019 CTF Roundtable, Q.16 under s. 89(14).