Unlike a sole-proprietorship, a corporation is seen by the CRA as being a separate taxpayer. This means that a shareholder, even a shareholder who owns 100% of all the issued and outstanding shares, must account for their money separate from the corporation.
A shareholder loan is said to exist when a shareholder is lent money or otherwise becomes indebted to a corporation he or she is a shareholder of. A loan is distinct from dividends paid, remuneration paid, or even a shareholder benefit.
There are some nasty consequences possible when a shareholder becomes indebted to their corporation, including the inclusion of the full amount of the loan into the shareholder’s income.