This may be different in Canada, but in the US if a company is owned 100% it makes more sense to have it taxed as an S Corp. In that case all "distributions" ar

This may be different in Canada, but in the US if a company is owned 100% it makes more sense to have it taxed as an S Corp. In that case all "distributions" are salary that is taxed as ordinary income. This is done because even though the income tax rate is high, it is lower than getting double taxed (paying corporate tax rates plus playing capital gains). So generally if a company is owned 100% by one person there are no distributions. This means for a company like this equity has virtually no value and profit sharing is a far better deal for everyone involved.