Schedule 9 (related and associated corporations)
Schedule 9, Related and Associated Corporations, is a T2 schedule that records corporate relationships. The CRA’s T2 guide says to complete it if the corporation is related to or associated with at least one other corporation, and that association is based on control.
A buyer meets Schedule 9 after a share purchase if the target is now in a group, or when it reviews the seller’s filed T2 returns. The CRA’s form page says the schedule is for a corporation with one or more related or associated corporations, to indicate corporate relationships.
How association is tested
The T2 guide says association is based on control, which can be exerted directly or indirectly in any way, by a person or a group of persons. It says that, in general, a corporation is associated with another if it meets one of six conditions at any time in the tax year. The guide’s reference is to sections 251 and 256 of the Income Tax Act.
What to ask
- Which corporations the seller reported as related or associated in each year
- Whether the purchase changes which corporations are associated with the target
- Whether associated CCPCs filed the agreement that allocates the business limit
See associated corporations and why buyers ask for three years of tax returns.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentT2SCH9 Related and Associated Corporations
- 02Canada Revenue AgencyGovernmentT2 Corporation – Income Tax Guide – Chapter 2: Page 2 of the T2 return
- 03Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
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