Debt Vs Equity Financing — Strategic Capital Planning

Your choice of financing affects every part of your business — from control and taxes to long-term growth. Mackisen CPA Auditors Montreal builds CPA-certified debt and equity structures that maximize tax efficiency, strengthen investor trust, and meet CRA requirements.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 15: Governs shareholder loans and equity contributions.
Income Tax Act (Canada) Section 20(1)(c): Defines deductible debt interest.
Taxation Act (Quebec) Section 34: Regulates debt and equity reporting.
CPA Canada Handbook Section 3856: Classifies equity vs liability accounting.
Bank Act (Canada) Section 462: Sets financial reporting standards for credit compliance.

Key Court Decisions
Beaudoin v. The Queen (2020): Penalized incorrect classification of shareholder funds.
Simard Beaudry Construction v. Canada (2019): Accepted CPA-supervised capital restructuring.
Lincora Group v. Quebec (2019): Penalized misreporting of financial capital.
Royal Bank v. Canada (2019): Approved CPA-certified balance sheets.
Tremblay Holdings v. The Queen (2021): Validated CPA reports for investor compliance.

Why CRA and Lenders Watch Funding Structures
CRA audits equity and debt transactions to prevent hidden distributions or disguised loans. Mackisen CPA Auditors Montreal ensures full transparency, compliance, and optimization.

Mackisen Strategy
Capital Structure Design — Balance debt and equity efficiently.
Tax Optimization — Maximize deductions without losing control.
CPA Documentation — Certify financial accuracy for lenders and investors.
Equity Planning — Manage shareholder transactions legally.
Monitoring — Maintain compliance with CRA filings and ratios.

Powering Client Needs and Financial Security
A Montreal energy firm raised $2.5M in equity under CPA supervision. A Quebec exporter improved leverage ratios. A Vancouver franchise optimized shareholder loans for CRA compliance.
How Mackisen Clients Benefit

• CPA-verified capital structure

• Lower taxes and improved ratios

• Stronger lender and investor confidence

• CRA and Revenu Québec compliance

Common Questions
Is debt better for taxes? Yes, interest is deductible.
Can equity hurt control? Possibly—depends on structure.
Does CRA audit shareholder loans? Yes.
Can I refinance equity? Yes, with CPA oversight.
Can Mackisen manage investor reporting? Yes, complete service.

Why Mackisen
Mackisen CPA Auditors Montreal provides capital structure solutions that combine compliance, strategy, and financial growth.