I-3 - Taxation Act

Section 21.20.1 Disposition versions

2006-03-01

21.20.1. For the purposes of section 21.20, the expression “specified class” means a class of shares of the capital stock of a corporation where, under the terms or conditions of the shares or any agreement in respect thereof,

(a)  the shares are not convertible or exchangeable;

(b)  the shares are non-voting;

(c)  the amount of each dividend payable on the shares is a fixed amount or is determined by reference to a fixed percentage of the fair market value of the consideration for which the shares were issued;

(d)  the annual rate of the dividend on the shares, expressed as a percentage of the fair market value of the consideration for which the shares were issued, cannot in any event exceed the prescribed rate of interest at the time the shares were issued; and

(e)  the amount that any holder of the shares is entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm’s length cannot exceed the aggregate of the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends thereon.

1990, c. 59, s. 28; 1997, c. 3, s. 71.