I-3 - Taxation Act

Section 21.3.5 Disposition versions

2006-06-13

21.3.5. For the purpose of determining, in accordance with section 21.3.4, whether a person or group of persons is a significant shareholder, or a significant group of shareholders, as the case may be, of a particular corporation,

(a)  subject to the second paragraph, the rules set out in paragraphs d to f of section 21.20.2 apply in respect of the ownership of the shares of the capital stock of the particular corporation;

(b)  another corporation, a partnership or a trust is deemed not to own, or not to be deemed to own because of the application of subparagraph a, a share of the capital stock of the particular corporation that is deemed to be owned, because of the application of that subparagraph, by

i.  a shareholder of the other corporation,

ii.  a member of the partnership, or

iii.  a beneficiary under the trust or, if it is a trust referred to in section 467, the person referred to in that section;

(c)  a person is deemed to have owned, immediately before 12 June 2003, a share the person acquired after 11 June 2003 from another person with whom the person was not dealing at arm’s length, if that other person owned the share immediately before 12 June 2003;

(d)  if, between 11 June 2003 and 1 July 2004, the particular corporation was the subject of an acquisition of control that was the result of a transaction to which any of the provisions referred to in the second paragraph of section 21.1 refers, the transaction is deemed to have been completed on 11 June 2003 for the purpose of applying sections 21.3.2 and 21.3.3 in respect of a subsequent acquisition of control of the particular corporation for the purposes of that provision;

(e)  a person is deemed to have exercised, on 11 June 2003, one or more rights referred to in paragraph b of section 20 that the person exercised after that date but had acquired before 12 June 2003; and

(f)  a person is deemed to have performed, on 11 June 2003, one or more obligations described in the third paragraph that the person performed after that date but had contracted before 12 June 2003.

Despite subparagraph 1 of subparagraph i of paragraph f of section 21.20.2 and subparagraphs ii and iv of that paragraph f, the number of shares of the capital stock of a corporation that the members of a group who are beneficiaries under a trust or the members of a group who are persons referred to in section 467 in respect of a trust referred to in that section are deemed to own because of the application of subparagraph a of the first paragraph to each of them, may not be greater than the number of shares of that capital stock that are owned, or deemed to be owned because of the application of that subparagraph a, by the trust.

An obligation to which subparagraph f of the first paragraph refers is an obligation whose performance puts the person who contracted it in the same position in relation to the control of a corporation as that in which the person would be if the person had acquired and exercised any of the rights referred to in paragraph b of section 20.

2006, c. 13, s. 27.