I-3 - Taxation Act

Section 544 Disposition versions

2006-03-01

544. (1)  For the purposes of this chapter, an amalgamation is a merger of several taxable Canadian corporations, hereinafter called “predecessor corporations”, which are replaced to form one corporate entity hereinafter referred to as the “new corporation”, in such a manner that, on account of such merger,

(a)  all of the property of the predecessor corporations immediately before the merger, except an amount receivable from a predecessor corporation or a share of the capital stock of such a corporation, becomes property of the new corporation;

(b)  all the liabilities of the predecessor corporations immediately before the merger, except an amount payable to a predecessor corporation, become liabilities of the new corporation; and

(c)  all of the shareholders, who owned shares of the capital stock of any predecessor corporation immediately before the merger, receive a share of the capital stock of the new corporation, excepting the predecessor corporations themselves.

(2)  An amalgamation does not result from the acquisition of property of one corporation by another or from the distribution of property of another corporation being wound up to another corporation.

(3)  For the purposes of paragraph c of subsection 1, where there is a merger of a corporation and of one or more of its subsidiary wholly controlled corporations or of several corporations each of which is a subsidiary wholly-controlled corporation of the same corporation, any share of the capital stock of a predecessor corporation owned by a shareholder, except a predecessor corporation, immediately before the merger that was not cancelled on the merger is deemed to be a share of the capital stock of the new corporation received by the shareholder by virtue of the merger as consideration for the disposition of a share of the capital stock of the predecessor corporation.

(4)  Where there has been an amalgamation of a corporation and one or more of its subsidiary wholly-owned corporations or two or more corporations each of which is a subsidiary wholly-owned corporation of the same person, the new corporation is, for the purposes of Chapter VII.1 of the Act respecting the application of the Taxation Act (chapter I-4) and sections 332.1, 332.2, 359.1 to 359.17, 362 to 418.36, 419.1 to 419.4 and 419.6, deemed to be the same corporation as, and a continuation of, each predecessor corporation. However, this subsection shall in no respect affect the determination of any predecessor corporation’s fiscal period, taxable income or tax payable.

(4.1)  (Subsection replaced).

(5)  For the purposes of subsections 3 and 4, this subsection and the second paragraph of section 547.1, and notwithstanding section 1, “subsidiary wholly-owned corporation” of a particular person means a corporation all the issued and outstanding shares of the capital stock of which are owned by

(a)  the particular person;

(b)  a corporation that is a subsidiary wholly-owned corporation of the particular person; or

(c)  any combination of persons each of which is a person described in paragraph a or b.

1972, c. 23, s. 422; 1975, c. 22, s. 126; 1978, c. 26, s. 96; 1980, c. 13, s. 52; 1982, c. 5, s. 124; 1984, c. 15, s. 113; 1985, c. 25, s. 95; 1986, c. 19, s. 119; 1989, c. 77, s. 58; 1994, c. 22, s. 199; 1995, c. 49, s. 143; 1997, c. 3, s. 71; 1998, c. 16, s. 170.