I-3 - Taxation Act

Section 965.17.5.2 Disposition versions

2017-12-07

965.17.5.2. (Repealed).

2002, c. 9, s. 38; 2004, c. 21, s. 238; 2017, c. 29, s. 166.

2006-03-01

965.17.5.2. A qualified corporation that carries on a particular business that may, if the Minister so decides, be considered in fact to consist mainly in the continuance of a business or part of a business carried on by another taxpayer before the time of the beginning of the carrying on of the particular business by the qualified corporation and that makes a public share issue, convertible security issue or non-guaranteed convertible security issue not later than 365 days after the beginning of the carrying on of the particular business by the qualified corporation, is a growth corporation if,

(a)  on the date of the receipt for the final prospectus or the exemption from filing a prospectus, the qualified corporation meets the requirements of subparagraphs a, b, d and e of the first paragraph of section 965.17.2;

(b)  throughout the period extending from the time of the beginning of the carrying on of the particular business by the qualified corporation to the date of the receipt for the final prospectus or of the exemption from filing a prospectus, it had not fewer than five full-time employees who are not insiders within the meaning of section 89 of the Securities Act (chapter V-1.1) or persons related to such insiders; and

(c)  immediately before the time of the beginning of the carrying on of the particular business by the qualified corporation, the other taxpayer had, in relation to that business or part of a business, not fewer than five full-time employees who are not insiders within the meaning of section 89 of the Securities Act or persons related to such insiders,

i.  throughout a 12-month period that includes the time of the beginning of the carrying on of the particular business by the qualified corporation and that is established as if the period from the time of the beginning of that carrying on of the particular business to the date of the receipt for the final prospectus or of the exemption from filing a prospectus were applicable to the other taxpayer and not to the qualified corporation, or

ii.  throughout a 6-month period that includes the time of the beginning of the carrying on of the particular business by the qualified corporation and that is established as if the period from the time of the beginning of that carrying on of the particular business to the date of the receipt for the final prospectus or of the exemption from filing a prospectus were applicable to the other taxpayer and not to the qualified corporation, where

(1)  the other taxpayer has already made a public issue of shares with the stipulation that they could be included in a stock savings plan,

(2)  a class of shares of the capital stock of the other taxpayer is listed on a Canadian stock exchange immediately before the time of the beginning of the carrying on of the particular business by the qualified corporation, and

(3)  a class of shares of the capital stock of the qualified corporation is listed on a Canadian stock exchange on the date of the receipt for the final prospectus or of the exemption from filing a prospectus.

For the purposes of the first paragraph, the continuance of a business or part of a business carried on by another taxpayer before the beginning of the carrying on, by a qualified corporation, of the particular business results from

(a)  the acquisition or rental, by the qualified corporation, of property from the other taxpayer who, throughout the part of the period described in subparagraph i or ii of subparagraph c of the first paragraph preceding that acquisition or rental, carried on a business in which the other taxpayer used that property; or

(b)  the carrying on, by the qualified corporation, of a new business that may reasonably be considered in fact to consist in the extension of a business or part of a business carried on by the other taxpayer.

For the purposes of subparagraph i of subparagraph c of the first paragraph, the other taxpayer is deemed to have had not fewer than five full-time employees who are not insiders within the meaning of section 89 of the Securities Act or persons related to such insiders, where

(a)  a class of shares of its capital stock is, throughout the 12-month period preceding the time of the beginning of the carrying on of the particular business by the qualified corporation, listed on a Canadian stock exchange; and

(b)  a person, other than such an insider or a person related thereto, or a partnership provides the other taxpayer, in the period referred to in subparagraph a, with services under a service contract and that other taxpayer would normally require the services of more than five full-time employees if those services were not provided.

2002, c. 9, s. 38; 2004, c. 21, s. 238.