Incorporating a production company: one corp above the slate, one per production

No corporation, no credit

The OFTTC, the OPSTC, and their federal counterparts are refundable credits claimed on a corporate tax return — they do not exist for individuals. Eligibility also attaches to the company itself, not just the project: the claiming corporation needs the right residency, control, and permanent-establishment profile, and certification through Ontario Creates and CAVCO turns on Canadian-control and content tests specific enough that we confirm eligibility before the cap table is locked, not after a financier has taken shares. An investor brought in at the wrong level, or the wrong class, can cost more in lost credits than they contributed in cash.

Broadcasters, distributors, and interim lenders reinforce the same point from the commercial side. Nobody licenses a series from an individual, and no lender advances against a credit estimate without a corporation to take security in.

One production, one corporation

The single-purpose company per production is the industry pattern because everything downstream assumes it. The credit claim and the final cost report must tie to one entity's general ledger — a corporation that only ever contained this production produces a clean audit trail, while a company mixing two shoots and development overhead produces questions. Interim lenders take security against that company's credit receivable and bank account without exposure to your other projects, and a completion problem or lawsuit on one shoot stays inside its own corporate walls.

On service productions, the US studio contracts with the single-purpose company for delivery, which keeps the W-8BEN-E, the zero-rated service fee, and the HST refund position in one tidy entity — the mechanics live on our film production cross-border tax page. After delivery, the company files its final cost report and final T2, collects the credit, settles with financiers, and winds down. The corporation was always meant to have a lifespan.

What the parent company keeps

The development company above the slate holds what must outlive any one project: option agreements and underlying rights, the development slate, ongoing staff, the office lease, and the shares of each production company. It charges producer fees and overhead recoveries to the productions below it — and those intercompany charges deserve real paper, because they move dollars between credit bases and a credit auditor will read them.

Two group-level effects are worth knowing early. Corporations under common control are associated and share one small business deduction limit — usually a footnote next to refundable credits, but real once the devco earns steady service income. And losses do not travel between corporations automatically, so a devco carrying years of development spend needs its own plan for using them.

Where things sit in a two-layer structure

Registrations before prep week

Each production company needs its accounts open before the first cheque, because production payroll scales instantly: a business number, corporate tax account, and a payroll account sized for weekly cast and crew remittances, plus WSIB coverage in Ontario. Union payrolls compound the load — ACTRA, DGC, and IATSE agreements each carry their own fringes and retirement contributions on top of source deductions — so the remitter category and the payroll calendar need to be right before day one of prep, not discovered at the first threshold breach. GST/HST registration matters even when revenue is zero-rated — service productions billing a non-resident studio typically sit in a refund position, recovering HST on Ontario spend month after month, and that refund is real cash flow inside a tight budget.

Payments to non-resident talent make the production a withholding agent — 23% on non-resident actors and Regulation 105 on other non-resident service providers — which is a compliance file the corporation carries from its first day, covered in depth on the cross-border page. For the full setup sequence and the annual filings that keep both layers in good standing, see incorporation and compliance.