204. No Québec company may, directly or indirectly, by the purchase of shares or the granting of loans, including financing by leasing, invest an amount exceeding $500,000 or 1% of the assets, whichever is greater, or 11/2% of the assets, if the assets exceed $500,000,000, in one person or a group of associated persons.
In computing that amount, no account shall be taken of securities contemplated in subparagraphs 2, 3, 5 and 6 of the first paragraph of section 203 nor of hypothecary claims the repayment of which is approved or insured within the meaning of the National Housing Act (Revised Statutes of Canada, 1985, chapter N-11) or the excess amount of which is guaranteed or insured by the government of Québec, of another Canadian province, of Canada or of a territory of Canada, or by any agency thereof, or under a hypothec insurance policy issued by an insurance company authorized to carry on business in Canada.
For the purposes of this section, a person is an associate of another person where
(1) the person is the spouse of the other, or is the minor child of either;
(2) one person is a legal person and the other is a director or officer thereof or the spouse or minor child of that officer or director;
(3) one person is a partnership and the other is one of the partners;
(4) they are legal persons affiliated with one another.
This section does not apply to a loan to or a placement or other investment in a subsidiary of the company.