Schedule 11 (transactions with shareholders, officers or employees)
Schedule 11 is the T2 return schedule on which a corporation gives details of certain transactions with its shareholders (or related persons), officers or employees. The CRA says to complete it if the corporation had such transactions, other than those carried out in the ordinary course of business or listed on Form T106.
A buyer meets Schedule 11 when checking what a target’s return says about dealings between the company and its owners, as the answer on which tax filings to review describes for the wider set of filings. The CRA’s form page says to use the schedule to provide details of certain transactions between a corporation and shareholders (or related persons), officers or employees.
What the CRA guide says
The CRA’s T2 corporation income tax guide says to complete Schedule 11 if the corporation had transactions with shareholders, officers or employees. It says not to include transactions the corporation carried out in the ordinary course of business, or any transactions listed on Form T106. An empty schedule therefore does not, on its own, show that there were no dealings with owners.
What to ask
- Whether Schedule 11 was filed for each year reviewed, and what it reports
- How its entries compare with the shareholder loan balances in the financial statements
- Which transactions were treated as ordinary course, and on what basis
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentT2SCH11 Transactions with Shareholders, Officers or Employees
- 02Canada Revenue AgencyGovernmentT2 Corporation – Income Tax Guide – Chapter 2: Page 2 of the T2 return
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