Corporate Restructuring & Reorganizations · BC
The right structure unlocks planning that a wrong one makes impossible.
Corporate restructuring — setting up a holding company, reorganizing a multi-entity group, or rolling assets into a corporation on a tax-deferred basis — is specialist work that requires precise sequencing. Clearline's Tax group leads every restructuring engagement, working alongside your BC business lawyer to get it done correctly.
Doing a reorganization incorrectly triggers the tax it was designed to avoid
A tax-deferred rollover under ITA s.85 or s.86 has specific conditions and elections that must be filed correctly and on time. An asset transfer done without proper tax planning — or with an improperly filed election — can trigger immediate recognition of accrued gains at full tax rates.
Most businesses outgrow their original structure without realizing it
A structure that was efficient at $1M in revenue often becomes costly at $5M or $10M. The passive income grind-down, inefficient compensation flows, and missed income-splitting opportunities compound year over year. The longer the suboptimal structure runs, the more it costs to unwind.
Restructuring is a sequenced process — order matters
Incorporating a business, setting up a holding company, establishing a family trust, and implementing a management fee arrangement all interact with each other. The order in which these steps are completed determines the tax consequences. Done in the wrong sequence, the same steps produce a taxable event instead of a tax-deferred reorganization.
The Tax group identifies restructuring candidates through the annual corporate tax return review
One of the things our Tax group looks for when reviewing every Clearline corporate return is whether the client's current structure still makes sense. Restructuring conversations shouldn't start when something has gone wrong — they should start when the corporate tax return reveals that the structure no longer fits the business.
Insights for BC Private Corporation Owners
When and how corporate restructuring creates value
Section 85 Rollovers
Transferring assets to a corporation on a tax-deferred basis — how ITA s.85 works and when to use it
An ITA s.85 rollover allows a business owner to transfer assets — including shares, property, or a business — to a corporation at a value that defers the tax on accrued gains. It's one of the most commonly used corporate reorganization tools, and one of the most commonly done incorrectly.
Read more →Holding Company SetupSetting up a holding company — the tax, creditor protection, and planning benefits
A holding company that receives intercorporate dividends from your operating company tax-free accumulates investment wealth outside the operating entity, protects assets from operating company creditors, removes passive income from the SBD calculation, and creates flexibility for estate planning and exit structuring.
Read more →Estate FreezeThe estate freeze — locking in today's value and passing future growth to the next generation
An estate freeze under ITA s.86 caps the founder's accrued gain at today's value. New common shares issued to a family trust allow each beneficiary to access their own Lifetime Capital Gains Exemption on future growth — multiplying the shelter across the family.
Read more →Multi-Entity ReorganizationsReorganizing a multi-entity corporate group — associated corporations, management companies, and intercorporate flows
As businesses scale, the original corporate structure often needs to be redesigned. Associated corporation rules, management fee arrangements, and intercorporate dividend flows all need to work together — and the order in which each step is taken determines the tax outcome.
Read more →When to RestructureSignals that your current structure no longer fits — and what the corporate tax return review reveals
The most common signals that a restructuring is warranted: passive income approaching the SBD threshold; accumulated wealth exposed to operating company creditors; family members who could be involved in ownership but aren't; or a business sale within three to five years that requires purification planning now.
Read more →Get StartedBook a free corporate structure review
No obligation. Our Tax group will review your current corporate structure, identify any planning gaps, and tell you plainly whether a reorganization is worth considering — and what it would involve.
Book a consultation →The Tax group principals who lead restructuring engagements
Corporate restructuring and reorganization work is led by Clearline's Tax group — specialists in tax-deferred rollovers, estate freezes, holding company structures, and multi-entity reorganizations for BC private corporations.
Shane Schepens
CPA, CA · Principal
Tax planning, corporate reorganizations, succession planning
Bilal Kathrada
CPA, CA · Principal
Income tax and succession planning for owner-managed businesses
Gurbir Rai
CPA · Principal
Corporate tax, private enterprise, tax planning
Annelie Vistica
CPA, CA · Principal
Business setup, growth planning, estate transitioning
Common Questions
Questions clients ask us
A tax-deferred rollover — most commonly under ITA s.85 — allows a business owner to transfer property to a corporation at an elected value below fair market value, deferring the tax on any accrued gain until the property is eventually disposed of by the corporation. It's used when: a sole proprietor incorporates and wants to transfer business assets to the new corporation without triggering immediate tax; an owner wants to transfer appreciated shares or other assets to a holding company; or a restructuring requires moving assets between related corporations without triggering a taxable disposition. The rollover has specific conditions and elections that must be filed correctly — improperly structured rollovers can trigger the gains they were designed to defer.
A holding company becomes relevant when: your operating corporation is generating retained earnings beyond what you need in the business; you want to protect accumulated wealth from the creditors of the operating company; your passive investment income is approaching the $50,000 SBD grind-down threshold; you are planning for a business sale and want to hold equity in a structure that allows multiple LCGE claims; or you want flexibility for estate planning through a family trust. Whether a holdco makes sense depends on your specific situation — we model the actual tax and cost implications before recommending it.
An estate freeze under ITA s.86 is a corporate reorganization that locks in the founder's accrued gain at today's value — converting existing common shares to fixed-value preferred shares — and issues new common shares that capture all future growth. The new common shares are typically issued to a family trust, whose beneficiaries (adult children) can each access their own $1.25M Lifetime Capital Gains Exemption on that future growth. An estate freeze makes sense when: the business has significant current value and is expected to grow substantially; there are family members who can be involved as beneficiaries; and the founder is willing to pass future appreciation to the next generation. The freeze needs to be implemented well before any intended sale — it cannot be done retroactively.
One of the specific things our Tax group looks for when reviewing every Clearline corporate tax return is whether the client's corporate structure still makes sense. Signals include: passive income approaching the SBD threshold (visible on Schedule 7); significant retained earnings exposed to operating company risk (visible on the balance sheet); share structures that don't accommodate family ownership; or compensation flows that would be more efficient through a different structure. We raise these observations as part of the annual corporate tax return review process — before they become problems.
Timeline depends on the complexity of the reorganization and the need for coordination with legal counsel. A simple s.85 rollover for an incorporating sole proprietor can be completed in four to six weeks. A multi-step reorganization involving a holdco setup, estate freeze, and family trust can take three to six months, particularly where share structure changes require shareholder approval and new corporate documentation. The Tax group works alongside your BC business lawyer — who handles the corporate law aspects — to ensure steps are completed in the correct sequence.
The Clearline Approach
What working with Clearline actually looks like
Corporate restructuring is specialist work that requires precise sequencing. Clearline's Tax group leads every restructuring engagement — working alongside your BC business lawyer to ensure each step is completed correctly and in order.
1
Structure Diagnostic
We review your current corporate structure, corporate tax return filings, share structure, and ownership — and identify the specific gaps or opportunities that make a reorganization worth considering.
2
Reorganization Plan
We design the reorganization — identifying the specific steps, elections, and valuations required — and model the tax consequences of each step before any action is taken.
3
Legal Coordination
We work alongside your BC business lawyer, who handles share structure changes, corporate documentation, and any shareholder agreements required. We provide the tax structure; your lawyer handles the corporate law.
4
Execution & Elections
We prepare and file all required tax elections — s.85 elections, s.86 reorganization documentation, T2057 forms — on time and with supporting valuations where required.
5
Ongoing Structure Monitoring
We monitor the restructured group through subsequent corporate tax return reviews — ensuring the new structure continues to operate as intended and identifying when further changes are warranted.
Talk to Clearline's Tax group about your corporate structure.
Our Tax specialists lead every restructuring engagement — from simple s.85 rollovers to multi-entity reorganizations and estate freezes. No obligation — just a direct conversation about your current structure and whether it still makes sense.
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