Manufacturing and distribution
The building, the machines, the accounts. And the money that sits behind them.
Capital-heavy businesses keep a reserve, and the reserve gets taxed every year it sits. The plant runs on a handful of people. The exit, when it comes, is usually to the next generation, and usually with a tax bill nobody planned for.
Licensed across Canada. What to expect
The reserve you keep for the next machine is taxed three times on the way to your kids.
Manufacturers and distributors hold cash for equipment cycles and inventory swings. Inside the corporation it is passive income: about 50% tax on what it earns, the small business rate grinding away past $50,000 a year of it, and a taxable dividend on the way out.
Corporate-owned participating whole life turns that reserve into an asset that grows tax-deferred, stays available as collateral for the next line, and moves to the next generation through the capital dividend account tax-free. It is the cleanest succession asset a private corporation can hold.
See what leaving it there costs each year, on your own numbers.
Collateral for the next line
Cash value the bank can lend against, alongside the equipment and the building it already holds.
Not counted toward the line
Growth inside the policy is not passive income. The small business rate stays where it is.
Succession, funded
At death the benefit passes through the capital dividend account tax-free. The estate has liquidity without selling the plant.
Every lender asks who runs it if something happens to you, and who runs it if something happens to them.
The plant manager who knows every machine. The toolmaker nobody can replace in under a year. The salesperson who holds the three accounts that are half the revenue. When any of them is away for months, the equipment loan, the mortgage and the payroll do not wait.
Corporate-owned critical illness pays the corporation a tax-free lump sum on diagnosis. Key person coverage on the people the plant cannot run without funds the replacement, the ramp, and the accounts. Where two owners share the company, it funds the buy-sell.
The mortgage and the equipment
The building, the machines, the inventory line. Lenders do not pause because you are recovering.
Covered by a benefit that services the debtThe accounts
The customers who deal only with one person deal with somebody else, unless there is money to put someone in front of them.
Covered by key person coverageThe partner
Two owners, one diagnosis, and a shareholder agreement with no money behind it.
Covered by a funded buy-sell
