Entrepreneurship & Small Business

paying a spouse a wage from a Corperation held by the wife

  • Last Updated:
  • Nov 10th, 2017 3:29 pm
[OP]
Newbie
Aug 11, 2015
4 posts
Peterborough, ON

paying a spouse a wage from a Corperation held by the wife

General Business Question:
Can I as a Owner of a Ontario Corporation be forced to pay my spouse a wage,
When the Corporation is newly formed and is still operating in the red and not breaking even after expenses?
Where there is no funds for wages available and the Corporation can't make the remittances to Revenue Canada as of yet,??

S Robinson
4 replies
Deal Guru
Aug 2, 2010
10949 posts
2176 upvotes
Whomever is the President of the corp decides who gets paid what, if anything, and if the board of directors don't like what the President is doing then they replace him.
Deal Addict
Oct 7, 2007
3032 posts
676 upvotes
midnightmermaid wrote:
Nov 9th, 2017 8:13 pm
General Business Question:
Can I as a Owner of a Ontario Corporation be forced to pay my spouse a wage,
When the Corporation is newly formed and is still operating in the red and not breaking even after expenses?
Where there is no funds for wages available and the Corporation can't make the remittances to Revenue Canada as of yet,??

S Robinson
There is often a clause in the articles of incorporation that says you cannot pay a dividend if it will make the company insolvent. I am fuzzy on specifically where this is but I believe it is in the articles. Realizing wages are not dividends, does the company LEGALLY owe your spouse a wage? It might be something that is recorded as a debt owing now but payable at a later date.
Deal Guru
Aug 2, 2010
10949 posts
2176 upvotes
choclover wrote:
Nov 10th, 2017 10:39 am
There is often a clause in the articles of incorporation that says you cannot pay a dividend if it will make the company insolvent. I am fuzzy on specifically where this is but I believe it is in the articles. Realizing wages are not dividends, does the company LEGALLY owe your spouse a wage? It might be something that is recorded as a debt owing now but payable at a later date.
Yes it's about wages not dividends and of course if the company owes a debt they have to pay it. By the way the OP phrased the question it's really ambiguous whether she is employed by the corp or not. If so pay her what she's owed then fire her. Problem solved!
Deal Addict
User avatar
Mar 23, 2008
4748 posts
2319 upvotes
Edmonton
I'm confused about the situation... Who do you think is going to "force" you to pay ANYONE a salary, spouse or not? Is one spouse planning on suing the other one?

And you better be making any required remittances to the government, or that will catch up to you real quick...

C

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