It is a fundamental taxation principle that a corporation is a distinct entity.  Each shareholder is also a distinct entity.  This structure of independant relationships allows for economic advantages that can be made available for each shareholder.

The details of the relationship however must be structured according to rules using knowledge of the Income Tax Act otherwise the shareholder may incur a tax liability and penalties for following incorrect procedures.

Shareholders can have more than one relationship with the corporation which can allow for economic advantages, working advantages, investment advantages or business leverage.

The shareholder can be:

a) a creditor lending funds. b) a supplier. c) a customer. d) an employee. e) a subcontractor. f) a lessor.

Each of these relationships allows for enriched opportunities by creating circumstances that as an individual would not necessarily be available.

There also is the opportunity of share ownership which in itself makes available other advantages utilizing different share classes with individual rights and obligations and special tax advantages.

Corporate organization and relationships can provide many opportunties so there will be more blogs regarding share class ownership advantages, relationship advantages, living standard advantages and tax savings advantages that are available to those who utilize a corporation or corporations as part of their legal entities.