I-3 - Taxation Act

Section 771.6 Disposition versions

2009-06-04

771.6. A corporation is not a qualified corporation for a taxation year if, at any time in the period extending from the day of its incorporation to the end of the year, the corporation

(a)  was associated with any other corporation;

(b)  was a corporation other than a Canadian-controlled private corporation;

(c)  carried on a personal services business;

(d)  carried on an eligible business as a member of a partnership or as a co-participant in a joint venture with another person or a partnership;

(e)  was a beneficiary under a trust other than a mutual fund trust; or

(f)  carried on an eligible business principally as a result of acquiring or renting property from another person or a partnership who or which, at any time in the 12 months preceding that acquisition or rental, carried on a business in which he or it used that property and, by reason of that acquisition or rental, the corporation may reasonably be regarded as having continued to carry on the business or a part of the business of the other person or of the partnership.

Similarly, a corporation is not a qualified corporation for a taxation year if, for that year or a preceding taxation year,

(a)  all of its activities in the year do not consist entirely or almost entirely in carrying on an eligible business; or

(b)  its paid-up capital determined for the taxation year preceding the year or, where the corporation’s year is its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles, exceeds $15,000,000.

For the purposes of subparagraph b of the second paragraph, the paid-up capital of a corporation is

(a)  in respect of a financial institution, a corporation referred to in paragraph c of section 1132 or a mining corporation that has not reached the production stage, its paid-up capital that would be determined in accordance with Book III of Part IV if no reference were made to sections 1138.0.1, 1138.2.6 and 1141.3;

(b)  in respect of an insurance corporation, other than a corporation referred to in subparagraph a, its paid-up capital that would be determined in accordance with Title II of Book III of Part IV, if the corporation were a bank, if paragraph a of section 1140 were replaced by paragraph a of subsection 1 of section 1136 and if no reference were made to section 1141.3; and

(c)  in respect of a cooperative, its paid-up capital that would be determined in accordance with Title I of Book III of Part IV if no reference were made to sections 1138.0.1 and 1138.2.6.

1987, c. 21, s. 31; 1991, c. 8, s. 50; 1993, c. 64, s. 84; 1995, c. 63, s. 73; 1996, c. 39, s. 208; 1997, c. 3, s. 38; 1997, c. 85, s. 161; 2000, c. 39, s. 84; 2003, c. 9, s. 100; 2005, c. 23, s. 105; 2009, c. 5, s. 320; 2009, c. 15, s. 152.

2009-05-15

771.6. A corporation is not a qualified corporation for a taxation year if, at any time in the period extending from the day of its incorporation to the end of the year, the corporation

(a)  was associated with any other corporation;

(b)  was a corporation other than a Canadian-controlled private corporation;

(c)  carried on a personal services business;

(d)  carried on an eligible business as a member of a partnership or as a co-participant in a joint venture with another person or a partnership;

(e)  was a beneficiary under a trust other than a mutual fund trust; or

(f)  carried on an eligible business principally as a result of acquiring or renting property from another person or a partnership who or which, at any time in the 12 months preceding that acquisition or rental, carried on a business in which he or it used that property and, by reason of that acquisition or rental, the corporation may reasonably be regarded as having continued to carry on the business or a part of the business of the other person or of the partnership.

Similarly, a corporation is not a qualified corporation for a taxation year if, for that year or a preceding taxation year,

(a)  all of its activities in the year do not consist entirely or almost entirely in carrying on an eligible business; or

(b)  its paid-up capital determined for the taxation year preceding the year or, where the corporation’s year is its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles, exceeds $15,000,000.

For the purposes of subparagraph b of the second paragraph, the paid-up capital of a corporation is

(a)  in respect of a financial institution, a corporation referred to in paragraph c of section 1132 or a mining corporation that has not reached the production stage, its paid-up capital that would be determined in accordance with Book III of Part IV if no reference were made to sections 1138.0.1 and 1141.3;

(b)  in respect of an insurance corporation, other than a corporation referred to in subparagraph a, its paid-up capital that would be determined in accordance with Title II of Book III of Part IV, if the corporation were a bank, if paragraph a of section 1140 were replaced by paragraph a of subsection 1 of section 1136 and if no reference were made to section 1141.3; and

(c)  in respect of a cooperative, its paid-up capital that would be determined in accordance with Title I of Book III of Part IV if no reference were made to section 1138.0.1.

1987, c. 21, s. 31; 1991, c. 8, s. 50; 1993, c. 64, s. 84; 1995, c. 63, s. 73; 1996, c. 39, s. 208; 1997, c. 3, s. 38; 1997, c. 85, s. 161; 2000, c. 39, s. 84; 2003, c. 9, s. 100; 2005, c. 23, s. 105; 2009, c. 5, s. 320.

2006-03-01

771.6. A corporation is not a qualified corporation for a taxation year if, at any time in the period extending from the day of its incorporation to the end of the year, the corporation

(a)  was associated with any other corporation;

(b)  was a corporation other than a Canadian-controlled private corporation;

(c)  carried on a personal services business;

(d)  carried on an eligible business as a member of a partnership or as a co-participant in a joint venture with another person or a partnership;

(e)  was a beneficiary under a trust other than a mutual fund trust; or

(f)  carried on an eligible business principally as a result of acquiring or renting property from another person or a partnership who or which, at any time in the 12 months preceding that acquisition or rental, carried on a business in which he or it used that property and, by reason of that acquisition or rental, the corporation may reasonably be regarded as having continued to carry on the business or a part of the business of the other person or of the partnership.

Similarly, a corporation is not a qualified corporation for a taxation year if, for that year or a preceding taxation year,

(a)  all of its activities in the year do not consist entirely or almost entirely in carrying on an eligible business; or

(b)  its paid-up capital determined for the taxation year preceding the year or, where the corporation’s year is its first fiscal period, on the basis of its financial statements prepared at the beginning of the fiscal period in accordance with generally accepted accounting principles, exceeds $15,000,000.

For the purposes of subparagraph b of the second paragraph, the paid-up capital of a corporation is

(a)  in respect of a corporation referred to in paragraph a or c of section 1132 or a mining corporation that has not reached the production stage, its paid-up capital that would be determined in accordance with Book III of Part IV if no reference were made to sections 1138.0.1 and 1141.3;

(b)  in respect of an insurance corporation, other than a corporation referred to in subparagraph a, its paid-up capital that would be determined in accordance with Title II of Book III of Part IV, if the corporation were a bank, if paragraph a of section 1140 were replaced by paragraph a of subsection 1 of section 1136 and if no reference were made to section 1141.3; and

(c)  in respect of a cooperative, its paid-up capital that would be determined in accordance with Title I of Book III of Part IV if no reference were made to section 1138.0.1.

1987, c. 21, s. 31; 1991, c. 8, s. 50; 1993, c. 64, s. 84; 1995, c. 63, s. 73; 1996, c. 39, s. 208; 1997, c. 3, s. 38; 1997, c. 85, s. 161; 2000, c. 39, s. 84; 2003, c. 9, s. 100; 2005, c. 23, s. 105.