“Nothing happened this year”
Even an inactive corporation has to file a T2 return every year. A few bank charges, an interest payment or a dividend still need to be recorded and reconciled, so the books are ready when the return is due.
Holding company bookkeeping
A holding company might only see a handful of transactions a year, but every one of them matters. I keep holding company books clean and current, so the annual return is easy for whoever prepares it and nothing between your companies gets muddled.
Where holding company books get tricky
Holding company books are small, which is exactly why they get neglected. The problems usually show up years later.
Money moving between companies
When an operating company and a holding company lend to each other or pay each other, those balances need to be recorded the same way on both sides. Clear related-party balances are much easier than reconstructing them from bank statements later.
Dividends
Dividends paid or received need to be recorded with their dates, amounts and type. Whether a dividend is “eligible” or not depends on a designation by the company paying it, and your tax preparer will ask.
Investments and assets
Shares, property or investments held by the company need clean purchase and sale records. Records about long-term property and share registers are kept for good, not just six years.
Rules worth knowing
From the CRA. I don’t prepare T2 returns; I keep the books ready for whoever does.
- Annual return
- every corporation, active or not, files a T2 return each year, due within six months of its year-end.
- Dividends between Canadian corporations
- they keep their eligible or non-eligible character, and the paying company decides that designation.
- Dividend slips
- taxable dividends are reported on T5 slips; when the recipient is a corporation, only the actual amount is reported.
- Records
- business records are generally kept six years, but records of long-term property and share registers are kept indefinitely.
How I help holding companies
- Year-end bookkeepingA clean, reconciled year-end package every year, even for a quiet company.
- Catch-up & cleanup bookkeepingA few years behind? I’ll rebuild the books from statements, year by year.
- Monthly bookkeepingFor holding companies with regular activity, kept current month by month.
- QuickBooks Online setup & migrationA simple QuickBooks Online file set up for a low-activity company.
More common than you’d think
Lethbridge counted 3,836 businesses with employees in 2025 (Alberta Regional Dashboard), but that number leaves out businesses without any. Economic Development Lethbridge’s data platform notes that businesses without employees, including sole proprietors and holding companies, can make up 60% to 85% of all registered businesses.
If your holding company sits behind an operating business, like a contracting company or a group of rental properties, I can keep the books for both, so the two sets agree with each other.
Questions about holding companies
My holding company barely does anything. Does it need bookkeeping?
Yes, a little. Even an inactive corporation has to file a T2 return every year, and that return needs a set of books behind it, even if it’s short. It’s quick work when it’s done every year, and much slower when several years pile up.
Do you prepare the T2 return?
No. I prepare the books and a year-end package; your tax preparer files the return.
Can you keep the books for my operating company and holding company?
Yes. Keeping both means the balances between them are recorded the same way on each side, which saves your tax preparer from reconciling them later.
My holding company is a few years behind. Can you fix that?
Yes. I rebuild the books from bank statements, year by year, so each year’s return has proper books behind it. See catch-up bookkeeping.
What records does a holding company need?
Bank statements, records of any loans between companies, dividend details (dates, amounts and type), investment and property purchase and sale records, and the share register. Most are kept six years; records of long-term property and the share register are kept indefinitely.
Let’s get your books level.
Tell me where things stand, even if it’s messy, and I’ll tell you honestly what it’ll take to catch up and keep it that way. Every quote is confirmed after a free review of your books.
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