Paul Is One of Six Shareholders, but Not an Employee

question 108

Multiple Choice

Paul is one of six shareholders, but not an employee, of a Canadian controlled private cor- poration that manufactures doors.The corporation has a large amount of cash on hand and the other shareholders have agreed that the corporation can lend him $200,000 for a few years.To avoid having the principal included in his Taxable Income, the loan must meet which of the following conditions?

• A)It must be made at the interest rate prescribed by the Regulations to the Income Tax
• Act)
• B)It must be for the purchase of the company's shares.
• C)It must be repaid within one year of the end of the fiscal year in which it was made.
• D)It must have a specific repayment date.

---

Definitions:

Self-Efficacy Beliefs

Beliefs people have about their ability to successfully perform a specific task.

Performance Mastery

The process or act of acquiring complete knowledge or skill in a particular area or activity, leading to high levels of performance.

Verbal Persuasion

The act of using spoken words to convince or influence someone to believe or do something.

Physiological State

The condition of the body's normal biological functions at a given time, influenced by factors like genetics, age, and environmental conditions.