,canada ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
       ,,it-#fd;,r#d 7,3solidat$7
      ,9come tax act--,corpor,ns3
           ,associ,n & ,3trol

      ,see ,bullet9 ,revi.ns sec;n

             ,9 ,"o ,volume
           ,pr9t ,pages #a-ab
       ,brl ,pages ;i-;vi & #a-fc
    
































                 ,9dex
    
                               ,brl page
,3t5ts """""""""""""""""""""""""""""" #c
,applic,n """"""""""""""""""""""""""" #g
,summ>y """"""""""""""""""""""""""""" #h
,4cus.n & ,9t]pret,n """"""""""""""" #aj
  ,"s basic rules """""""""""""""""" #aj
    ,3trol ( ,"o ,corpor,n 0,ano!r
      ,corpor,n--,p>agraph
      #bef7#a77a7 7p>agraph #a7 """" #aj
    ,3trol ( ,two ,corpor,ns
      0,same ,p]son or ,gr\p (
      ,p]sons--,p>agraph
      #bef7#a77b7 7p>agraph #b7 """" #aa
    ,anti-,avoid.e ,provi.n--
      ,subsec;n #bef7#b.a7
      7p>agraph #c7 """""""""""""""" #aa
    ,bankrupt ,corpor,n ,n
      ,associat$--,p>agraph
      #abh7#a77f7 7p>agraph #d7 """" #ab
    ,corpor,ns ,c ,2 ,relat$ b ,n
      ,associat$ 7p>agraph #e7 """"" #ab
    
                                      ;i
                 ,9dex
    ,d1l+s ,2t ,corpor,ns ,n
      ,requir$ = ,associ,n
      7p>agraph #f7 """""""""""""""" #ac
    ,corpor,ns ,) ,di6]5t ,tax,n
      ,ye>s 7p>agraph #g7 """""""""" #ad
    ,two ,corpor,ns ,associat$ ,)!
      ,same ,corpor,n--,subsec;n
      #bef7#b7 7p>agraph #h7 """"""" #ae
  ,excep;ns """""""""""""""""""""""" #af
    ,situ,ns ,9volv+ an ,9debt$;s
      or ,redeema# ,%>es ,":
      ,associ,n ,is ,deem$ ,n
      6,o3ur--,subsec;n #bef7#c7
      7p>agraph #i7 """""""""""""""" #af
    ,two ,corpor,ns ,3troll$
      0,same ,executor1
      ,liquidator (a ,su3es.n or
      ,tru/ee--,subsec;n #bef7#d7
      7p>agraph #aj7 """"""""""""""" #ah
    ,corpor,n ,3troll$ 0,corporate
      ,tru/ee--,subsec;n #bef7#e7
      7p>agraph #aa7 """"""""""""""" #ai
    
                                     ;ii
                 ,9dex
    ,situ,ns ,9volv+ an ,9debt$;s
      or ,redeema# ,%>es ,":
      ,3trol ,is ,deem$ ,n 6,o3ur
      --,subsec;n #bef7#f7
      7p>agraph #ab7 """"""""""""""" #bj
  ,3trol """"""""""""""""""""""""""" #ba
    ,de ,jure ,3trol """"""""""""""" #ba
      ,! g5]al te/ 7p>agraph #ac7 "" #ba
      ,vot+ p[] 6w9d up ! corpor,n
        7p>agraph #ad7 """"""""""""" #bc
      ,b5eficial [n]s ( %>es
        7p>agraph #ae7 """"""""""""" #bd
      ,e6ect ( ca/+ vote
        7p>agraph #af7 """"""""""""" #bd
      ,9direct 3trol
        7p>agraph #ag7 """"""""""""" #be
      ,e6ect ( special provi.ns
        7p>agraph #ah7 """"""""""""" #bf
    ,de ,facto ,3trol--,subsec;n
      #bef7#e.a7
      7p>agraphs #aiabc7 """"""""""" #bg
  ,gr\p ( p]sons """"""""""""""""""" #cb
  
                                    ;iii
                 ,9dex
    ,def9i;n--,p>agraph
      #bef7#a.b77a7 7p>agraph #bd7   #cb
    ,applic,n ( ,p>agraph
      #bef7#a.b77a7 7p>agraph #be7   #cc
    ,simultane\s ,3trol (a
      ,corpor,n--,p>agraph
      #bef7#a.b77b7 7p>agraph #bf7   #cd
  ,3trol ( two corpor,ns 0relat$
    p]sons or relat$ gr\ps (
    p]sons--p>agraphs #bef7#a77c71
    7d7 & 7e7 7p>agraphe #bg7 """""" #ce
  ,a4i;nal rules t c det]m9e
    [n]%ip ( %>es1 or 3trol1 (a
    corpor,n """"""""""""""""""""""" #da
    ,deem$ ,3trol 0! ,fair ,m>ket
      ,value ,te/--,p>agraph
      #bef7#a.b77c7 7p>agraph #bh7   #da
    ,deem$ ,[n]%ip ( ,%>es 0!
      8,look-,"?0 ,rules--
      ,p>agraphs #bef7#a.b77d7 to
      7f7 """""""""""""""""""""""""" #dc
      ,9troduc;n 7p>agraph #bi7 """" #dc
      
                                     ;iv
                 ,9dex
      ,look+ "? a corpor,n--
        ,p>agraph #bef7#a.b77d7
        7p>agraphe #cj7 """""""""""" #dc
      ,look+ "? a "pn]%ip--
        ,p>agraph #bef7#a.b77e7
        7p>agraph #ca7 """"""""""""" #de
      ,look+ "? a tru/--,p>agraph
        #bef7#a.b77f7
        7p>agraph #cb7 """"""""""""" #df
      ,look+ "? a *a9
        7p>agraph #cc7 """"""""""""" #ea
    ,p>5t ,deem$ 6,[n ,%>es ( ,*--
      ,subsec;n #bef7#a.c7
      7p>agraph #cd7 """"""""""""""" #ec
    ,op;ns or ,"rs--,subsec;n
      #bef7#a.d7 """"""""""""""""""" #ee
      ,e6ect ( op;n 7p>agraph #ce7   #ee
      ,3v]ti# securities
        7p>agraph #cf7 """"""""""""" #ef
      ,buy-sell agree;ts
        7p>agraph #cg7 """"""""""""" #eg
      ,simultane\s 3trol & deem$
        3trol 7p>agraph #ch7 """"""" #eh
                                      ;v
                 ,9dex
    ,simultane\s ,3trol at ,di6]5t
      ,levels (a ,corporate ,*a9--
      ,subsec;ns #bef7#f.a7 &
      7#f.b7 7p>agraph #ci7 """""""" #fa
,bullet9 ,revi.ns """""""""""""""""" #fc


















                                     ;vi
,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,numb]3 ,,it-#fd;,r#d 7,3solidat$7
,date3 ,see ,bullet9 ,revi.ns sec;n
,subject3 ,9come tax act--,corpor,ns3
  ,associ,n & ,3trol
,ref];e3 ,sec;n #bef 7al sec;n #bea7

  ,late/ ,revi.n3 p>agraph #cg
  ,at ! ,canada ,cu/oms & ,rev5ue ,ag5cy
7,,ccra71 we issue 9come tax 9t]pret,n
bullet9s 7,,it's7 9 ord] 6provide
te*nical 9t]pret,ns & posi;ns reg>d+
c]ta9 provi.ns 3ta9$ 9 9come tax law4
,due 6_! te*nical nature1 ,,it's >e us$
prim>ily 0\r /aff1 tax speciali/s1 & o!r
9dividuals :o h an 9t]e/ 9 tax matt]s4
,= ^? r1d]s :o pref] a less te*nical
explan,n (! law1 we (f] o!r public,ns1
s* z tax guides & pamphlets4

                                      #a
        ,,it-#fd;,r#d73solidat$7     a#a
  ,:ile ! -;ts 9 a "picul> p>agraph 9 an
,,it may relate 6provi.ns (! law 9 =ce
at ! "t !y 7 made1 s* -;ts >e n a
sub/itute =! law4 ,! r1d] %d1 "!=e1
3sid] s* -;ts 9 li<t (! relevant
provi.ns (! law 9 =ce =! "picul> tax,n
ye> 2+ 3sid]$1 tak+ 96a3.t ! e6ect ( any
relevant am5d;ts 6^? provi.ns or
relevant c\rt deci.ns o3urr+ af ! date
on : ! -;ts 7 made4
  ,subject 6! abv1 an 9t]pret,n or
posi;n 3ta9$ 9 an ,,it g5],y applies z
(! date on : x 0 publi%$1 un.s o!rwise
specifi$4 ,if "! is a subsequ5t *ange 9
t 9t]pret,n or posi;n &! *ange is
b5eficial 6taxpay]s1 x is usu,y e6ective
= future assess;ts & reassess;ts4 ,if1
on ! o!r h&1 ! *ange is n fav\ra#
6taxpay]s1 x w norm,y 2 e6ective =!
curr5t & subsequ5t tax,n ye>s or =
transac;ns 5t]$ 96af ! date on : ! *ange
is publi%$4
  ,if y h any -;ts reg>d+ matt]s 4cuss$
9 an ,,it1 pl1se s5d !m to3           #b
        ,,it-#fd;,r#d73solidat$7     b#a
  ,manag]1 ,te*nical ,public,ns &
    ,projects ,sec;n
  ,9come ,tax ,rul+s ,directorate
  ,policy & ,legisl,n ,bran*
  ,canada ,cu/oms & ,rev5ue ,ag5cy
  ,ottawa ,,on ,k#a;,a #j;,l#e

  ,mo/ ( \r public,ns >e availa# on \r
,web site at3 _+www.ccra.gc.ca_:
  ,? v].n is only availa# electronic,y4

                 ,3t5ts
    
,applic,n
,summ>y
,4cus.n & ,9t]pret,n
  ,"s basic rules
    ,3trol ( ,"o ,corpor,n 0,ano!r
      ,corpor,n--,p>agraph #bef7#a77a7
      7p>agraph #a7
    ,3trol ( ,two ,corpor,ns 0,same
      ,p]son or ,gr\p ( ,p]sons--
      ,p>agraph #bef7#a77b7
      7p>agraph #b7                   #c
        ,,it-#fd;,r#d73solidat$7     c#a
    ,anti-,avoid.e ,provi.n--,subsec;n
      #bef7#b.a7 7p>agraph #c7
    ,bankrupt ,corpor,n ,n ,associat$--
      ,p>agraph #abh7#a77f7
      7p>agraph #d7
    ,corpor,ns ,c ,2 ,relat$ b ,n
      ,associat$ 7p>agraph #e7
    ,d1l+s ,2t ,corpor,ns ,n ,requir$ =
      ,associ,n 7p>agraph #f7
    ,corpor,ns ,) ,di6]5t ,tax,n ,ye>s
      7p>agraph #g7
    ,two ,corpor,ns ,associat$ ,)! ,same
      ,corpor,n--,subsec;n #bef7#b7
      7p>agraph #h7
  ,excep;ns
    ,situ,ns ,9volv+ an ,9debt$;s or
      ,redeema# ,%>es ,": ,associ,n ,is
      ,deem$ ,n 6,o3ur--,subsec;n
      #bef7#c7 7p>agraph #i7
    ,two ,corpor,ns ,3troll$ 0,same
      ,executor1 ,liquidator (a ,su3es.n
      or ,tru/ee--,subsec;n #bef7#d7
      7p>agraph #aj7
                                      #d
        ,,it-#fd;,r#d73solidat$7     d#a
    ,corpor,n ,3troll$ 0,corporate
      ,tru/ee--,subsec;n #bef7#e7
      7p>agraph #aa7
    ,situ,ns ,9volv+ an ,9debt$;s or
      ,redeema# ,%>es ,": ,3trol ,is
      ,deem$ ,n 6,o3ur--,subsec;n
      #bef7#f7 7p>agraph #ab7
  ,3trol
    ,de ,jure ,3trol
      ,! g5]al te/ 7p>agraph #ac7
      ,vot+ p[] 6w9d up ! corpor,n
        7p>agraph #ad7
      ,b5eficial [n]s ( %>es
        7p>agraph #ae7
      ,e6ect ( ca/+ vote 7p>agraph #af7
      ,9direct 3trol 7p>agraph #ag7
      ,e6ect ( special provi.ns
        7p>agraph #ah7
    ,de ,facto ,3trol--,subsec;n
      #bef7#e.a7 7p>agraphs #ai-bc7
--------------------------------------#b
  ,gr\p ( p]sons
    ,def9i;n--,p>agraph #bef7#a.b77a7
      7p>agraph #bd7                  #e
        ,,it-#fd;,r#d73solidat$7     a#b
    ,applic,n ( ,p>agraph #bef7#a.b77a7
      7p>agraph #be7
    ,simultane\s ,3trol (a ,corpor,n--
      ,p>agraph #bef7#a.b77b7
      7p>agraph #bf7
  ,3trol ( two corpor,ns 0relat$ p]sons
    or relat$ gr\ps ( p]sons--p>agraphs
    #bef7#a77c71 7d7 & 7e7
    7p>agraph #bg7
  ,a4i;nal rules t c det]m9e [n]%ip (
    %>es1 or 3trol1 (a corpor,n
    ,deem$ ,3trol 0! ,fair ,m>ket ,value
      ,te/--,p>agraph #bef7#a.b77c7
      7p>agraph #bh7
    ,deem$ ,[n]%ip ( ,%>es 0! 8,look-
      ,"?0 ,rules--,p>agraphs
      #bef7#a.b77d7 to 7f7
      ,9troduc;n 7p>agraph #bi7
      ,look+ "? a corpor,n--,p>agraph
        #bef7#a.b77d7 7p>agraph #cj7
      ,look+ "? a "pn]%ip--,p>agraph
        #bef7#a.b77e7 7p>agraph #ca7
      
                                      #f
        ,,it-#fd;,r#d73solidat$7     b#b
      ,look+ "? a tru/--,p>agraph
        #bef7#a.b77f7 7p>agraph #cb7
      ,look+ "? a *a9 7p>agraph #cc7
    ,p>5t ,deem$ 6,[n ,%>es ( ,*--
      ,subsec;n #bef7#a.c7
      7p>agraph #cd7
    ,op;ns or ,"rs--,subsec;n #bef7#a.d7
      ,e6ect ( op;n 7p>agraph #ce7
      ,3v]ti# securities 7p>agraph #cf7
      ,buy-sell agree;ts 7p>agraph #cg7
      ,simultane\s 3trol & deem$ 3trol
        7p>agraph #ch7
    ,simultane\s ,3trol at ,di6]5t
      ,levels (a ,corporate ,*a9--
      ,subsec;ns #bef7#f.a7 & 7#f.b7
      7p>agraph #ci7
,bullet9 ,revi.ns

               ,applic,n
    
  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#fd;,r#c1 dat$ ,m>* #i1
#aiib4
                                      #g
                ,summ>y              c#b
    
  ,? bullet9 4cusses provi.ns 9 ! ,9come
,tax ,act t 3ta9 rules ) respect 6!
associ,n ( corpor,ns 7! 8associ,n
rules074 ,"! >e a numb] ( provi.ns 9 !
,act = : ! associ,n rules >e relevant
7e4g41 ^? p]ta9+ 6! small busi;s
deduc;n72 h["e1 a 4cus.n ( s* provi.ns
is \tside ! scope ( ? bullet94
  ,sec;n #bef 3ta9s ! associ,n rules4
,subsec;ns #bef7#a7 & 7#b7 provide !
g5]al rules ) respect 6:e!r "o corpor,n
is associat$ ) ano!r4 ,subsec;ns
#bef7#c71 7#d71 7#e7 & 7#f7 provide =
c]ta9 excep;nal circum/.es "u : !
associ,n ( "o corpor,n ) ano!r does n
o3ur4
  ,! ess5tial te/ 9 det]m9+ :e!r a
corpor,n is associat$ ) ano!r relies on
! 3trol (! corpor,n t is ex]cis$
8directly or 9directly 9 any mann]
:at"e40 ,? expres.n 5compasses3

                                      #h
        ,,it-#fd;,r#d73solidat$7     d#b
    --de jure 3trol 7i4e41 3trol 9 law71
      ! m1n+ ( : has be5 det]m9$
      0caselaw2 &
    --de facto 3trol 7i4e41 3trol 9
      fact71 z det]m9$ "u subsec;n
      #bef7#e.a74
  ,"! >e a numb] ( a4i;nal rules 9 sec;n
#bef1 9clud+ rules :3
    --provide or ext5d ! m1n+ ( c]ta9
      t]ms & 3cepts1 s* z a 8gr\p (
      p]sons0 & 83trol 0a gr\p (
      p]sons02
    --c result 9 deem$ 3trol 0m1ns (a
      fair m>ket value te/2
    --c result 9 deem$ [n]%ip ( %>es
      0m1ns ( 8look-"?0 rules2
    --c deem ! %>es (a * "u #ah 6be [n$
      0! *'s p>5t2
    --c result 9 deem$ [n]%ip ( %>es or
      3trol 0m1ns ( op;ns or "rs2 &
    --all[ = simultane\s 3trol 0two or m
      p]sons or gr\ps ( p]sons4
  ,any /ate;t 9 ? bullet9 ) respect 6!
"q ( :e!r corpor,ns >e associat$ )    #i
        ,,it-#fd;,r#d73solidat$7     e#b
ea* o!r1 or ) respect 6any rule t
relates 6t "q1 %d implicitly 2 tak5 z
m1n+ t s* "q or rule is 2+ 3sid]$ at a
"picul> po9t 9 "t1 un.s o!rwise /at$4

          ,4cus.n & ,9t]pret,n
    
            ,"s basic rules
    
     ,3trol ( ,"o ,corpor,n 0,ano!r
          ,corpor,n--,p>agraph
       #bef7#a77a7 7p>agraph #a7
    
#a4 ,"u p>agraph #bef7#a77a71 two
  corpor,ns >e associat$ ) ea* o!r if "o
  ( !m is 3troll$1 directly or 9directly
  9 any mann] :at"e1 0! o!r4 7,=a 4cus.n
  (! m1n+ ( 83troll$0 &! m1n+ (
  83troll$1 directly or 9directly 9 any
  mann] :at"e10 see p>agraphs #ac 6#ah &
  p>agraphs #ai 6#bc1 respectively47


                                     #aj
        ,3trol ( ,two ,corpor,ns     f#b
        0,same ,p]son or ,gr\p (
     ,p]sons--,p>agraph #bef7#a77b7
             7p>agraph #b7
    
#b4 ,"u p>agraph #bef7#a77b71 two
  corpor,ns >e associat$ ) ea* o!r if !y
  >e bo? 3troll$1 directly or 9directly
  9 any mann] :at"e1 0! same p]son or
  gr\p ( p]sons4 7,! m1n+ ( 8gr\p (
  p]sons0 is 4cuss$ 9 p>agraph #bd47
--------------------------------------#c
       ,anti-,avoid.e ,provi.n--
          ,subsec;n #bef7#b.a7
             7p>agraph #c7
    
#c4 ,subsec;n #bef7#b.a7 3ta9s an anti-
  avoid.e rule : deems two or m
  corpor,ns 6be associat$ ) ea* o!r if
  "o (! ma9 r1sons =! sep>ate exi/;e (
  ^? corpor,ns is 6reduce ! am.t ( 9come
  taxes o!rwise paya# 7or 69cr1se ! am.t
  ( refunda# 9ve/;t tax cr$its availa#
  "u sec;n #abg.a74 ,subsec;n #bef7#b.a7
  cd apply1 = example1 ": two "ps    #aa
        ,,it-#fd;,r#d73solidat$7     a#c
  ( :at cd r1sonably 2 3sid]$ 6be "o
  busi;s1 s* z ! manufactur+ & sales
  activities (a s+le busi;s1 >e c>ri$ on
  0two corpor,ns ea* ( : is 3troll$
  0di6]5t p]sons4 ,9 s* a case1 if x is
  r1sona# 63clude t ! sep>ate exi/;e (!
  corpor,ns is ma9ly tax-motivat$1 !
  corpor,ns w 2 deem$ 6be associat$ )
  ea* o!r4

         ,bankrupt ,corpor,n ,n
         ,associat$--,p>agraph
       #abh7#a77f7 7p>agraph #d7
    
#d4 ,p>agraph #abh7#a77f7 deems a
  corpor,n n 6be associat$ ) any o!r
  corpor,n 9 a tax,n ye> 5d+ 9 ! p]iod
  :5 x is bankrupt4

     ,corpor,ns ,c ,2 ,relat$ b ,n
        ,associat$ 7p>agraph #e7
    
#e4 ,two corpor,ns c 2 8relat$ p]sons0 z
  def9$ 9 subsec;n #bea7#b7 & / n    #ab
        ,,it-#fd;,r#d73solidat$7     b#c
  2 associat$ ) ea* o!r "u subsec;n
  #bef7#a74 ,z an example1 if #fe p] c5t
  (! vot+ %>es ( ,corpor,n ;,a >e [n$
  0,mr4 ;,a & #fj p] c5t (! vot+ %>es (
  ,corpor,n ;,b >e [n$ 0his bro!r1 ,mr4
  ;,b1 ! corpor,ns >e 8relat$ p]sons0
  pursuant 6subp>agraph
  #bea7#b77c77;ii72 h["e1 ! two
  corpor,ns wd n 2 associat$ ) ea* o!r
  un.s ! cross-[n]%ip te/ 9 p>agraph
  #bef7#a77c71 z 4cuss$ 9 p>agraph #bg1
  7 met4

        ,d1l+s ,2t ,corpor,ns ,n
          ,requir$ = ,associ,n
             7p>agraph #f7
    
#f4 ,two corpor,ns may 2 associat$ ) ea*
  o!r ev5 if ^? corpor,ns & _! %>ehold]s
  d n h any d1l+s ) ea* o!r4 ,associ,n
  dep5ds solely ^u ! fulfil;t (! 3trol &
  %>e [n]%ip require;ts set \ 9 subsec;n
  #bef7#a74
                                     #ac
      ,corpor,ns ,) ,di6]5t ,tax,n   c#c
          ,ye>s 7p>agraph #g7
    
#g4 ,if two corpor,ns h tax,n ye>s 5d+
  at di6]5t "ts 9 ! cal5d> ye>1 s*
  corpor,ns >e n associat$ ) ea* o!r 9 a
  "picul> tax,n ye> un.s1 on "s "d : is
  )9 t "picul> tax,n ye> = ea* ( !m1 !y
  >e associat$ ) ea* o!r4 ,= example1
  assume t ,corpor,n ;,a & ,corpor,n ;,b
  h ye>-5ds ( ,m>* #ca & ,septemb] #cj1
  respectively4 ,if1 on ,july #ca1
  #bjjj1 ,corpor,n ;,a acquires all !
  issu$ -mon %>es ( ,corpor,n ;,b1 ! two
  corpor,ns wd n 2 associat$ ) ea* o!r 9
  _! respective #bjjj tax,n ye>s4 ,? is
  ! case 2c ! date :5 !y f/ 2came
  associat$ ) ea* o!r1 al? )9 ! #bjjj
  tax,n ye> ( ,corpor,n ;,b 7assum+ x
  reta9s xs ,septemb] #cj ye>-5d af !
  acquisi;n ( 3trol71 is n )9 ! #bjjj
  tax,n ye> ( ,corpor,n ;,a4 ,if1 h["e1
  ! date :5 ,corpor,n ;,a acquir$ ! %>es
  ( ,corpor,n ;,b 0 ,febru>y #bh1 #bjjj1
  ! two corpor,ns wd 2 associat$ )   #ad
        ,,it-#fd;,r#d73solidat$7     d#c
  ea* o!r 9 _! respective #bjjj tax,n
  ye>s s9ce t date is )9 ! #bjjj tax,n
  ye> ( ea* ( !m4

     ,two ,corpor,ns ,associat$ ,)!
       ,same ,corpor,n--,subsec;n
         #bef7#b7 7p>agraph #h7
    
#h4 ,if two o!rwise unassociat$
  corpor,ns >e associat$ )! same ?ird
  corpor,n1 subsec;n #bef7#b7 deems !
  two corpor,ns 6be associat$ ) ea* o!r4
  7,"! >e excep;ns--": subsec;n #bef7#b7
  w n apply =! purposes (! small busi;s
  deduc;n4 ,= fur!r "picul>s1 see
  subsec;n #bef7#b747







                                     #ae
               ,excep;ns             e#c
    
     ,situ,ns ,9volv+ an ,9debt$;s
         or ,redeema# ,%>es ,":
     ,associ,n ,is ,deem$ ,n 6,o3ur
          --,subsec;n #bef7#c7
             7p>agraph #i7
    
#i4 ,subsec;n #bef7#c7 provides an
  excep;n1 9 "picul> circum/.es1 6!
  g5]al rules t two corpor,ns w 2
  associat$ ) ea* o!r :53
  --"o corpor,n 3trols1 directly or
    9directly 9 any mann] :at"e1 ! o!r
    corpor,n 7see p>agraph #a72 or
  --! two corpor,ns >e 3troll$1 directly
    or 9directly 9 any mann] :at"e1 0!
    same p]son 7see p>agraph #b74
  ,pursuant 6subsec;n #bef7#c71 ! two
  corpor,ns w 2 deem$ n 6be associat$ )
  ea* o!r :5 s* 3trol exi/s =! purpose (
  safegu>d+ ! "rs or 9t]e/s (! corpor,n
  t 3trols ! o!r corpor,n or ! p]son :o

                                     #af
        ,,it-#fd;,r#d73solidat$7     f#c
  3trols ! two corpor,ns 7ref]r$ 6in ?
  p>agraph z ! 83troll]07 9 respect (3
  7a7 any 9debt$;s [+ 6! 3troll]2 or
  7b7 any redeema# %>es [n$ 0! 3troll] 9
    ! 3troll$ corpor,n 7in ? p>agraph &
    9 p>agraph #ab1 8redeema# %>es0 m1ns
    %>es 6be redeem$ 0! 3troll$ corpor,n
    or %>es 6be pur*as$ 0a p]son or gr\p
    ( p]sons ) :om ! 3troll] d1ls at
    >m's l5g?74
  
  ,"! m/ al 2 an 5=cea# agree;t 9 place
  provid+ t 3trol w pass1 ^u ! o3urr;e (
  an ev5t t is likely 6o3ur1 6a p]son or
  gr\p ) :om ! 3troll] 0 d1l+ at >m's
  l5g?4 ,an example (a situ,n ":
  subsec;n #bef7#c7 applies mi<t 2 "o
  9volv+ a manufactur+ corpor,n t has
  f9.ed a d1l] corpor,n & has reta9$
  3trol1 directly or 9directly 9 any
  mann] :at"e1 ( t d1l] corpor,n1
--------------------------------------#d
  until ! manufactur+ corpor,n has
  recov]$ xs adv.es4 ,ano!r          #ag
        ,,it-#fd;,r#d73solidat$7     a#d
  example mi<t 2 ": a corpor,n l5ds m"oy
  6ano!r corpor,n or 6a *ief %>ehold]
  "!( & holds 3trol1 directly or
  9directly 9 any mann] :at"e1 (!
  corpor,n z secur;y4

        ,two ,corpor,ns ,3troll$
     0,same ,executor1 ,liquidator
        (a ,su3es.n or ,tru/ee--
           ,subsec;n #bef7#d7
             7p>agraph #aj7
    
#aj4 ,subsec;n #bef7#d7 5sures t :5 two
  or m corpor,ns1 n previ\sly associat$
  ) ea* o!r1 h -e "u ! 3trol (! same
  executor1 liquidator (a su3es.n or
  tru/ee 7ei a corpor,n or an 9dividual7
  "? ! d1?s ( _! respective 3troll+
  %>ehold]s1 ! corpor,ns w n1 = t r1son
  al"o1 2come associat$ ) ea* o!r4 ,?
  reliev+ provi.n does n apply if !
  executor1 liquidator or tru/ee acquir$
  3trol (! corpor,ns z a result ( "o or
  m e/ates or tru/s cr1t$ 0! same    #ah
        ,,it-#fd;,r#d73solidat$7     b#d
  9dividual or two or m 9dividuals n
  d1l+ ) ea* o!r at >m's l5g?4

     ,corpor,n ,3troll$ 0,corporate
      ,tru/ee--,subsec;n #bef7#e7
             7p>agraph #aa7
    
#aa4 ,subsec;n #bef7#e7 provides t1 if
  "o corpor,n--act+ z a tru/ee--3trols
  ano!r corpor,n "? a tru/1 ! two
  corpor,ns >e deem$ n 6be associat$ )
  ea* o!r4 ,? does n apply if a settlor
  (! tru/ 3trols or is a memb] (a relat$
  gr\p t 3trols ! corpor,n t is !
  tru/ee4 7,! t]m 8relat$ gr\p0 is def9$
  9 subsec;n #bea7#d7--see p>agraph
  #bg47






                                     #ai
          ,situ,ns ,9volv+ an        c#d
      ,9debt$;s or ,redeema# ,%>es
        ,": ,3trol ,is ,deem$ ,n
       6,o3ur--,subsec;n #bef7#f7
             7p>agraph #ab7
    
#ab4 ,z is ! case ) subsec;n #bef7#c7
  7see p>agraph #i71 subsec;n #bef7#f7
  d1ls ) c]ta9 situ,ns 9volv+ an
  9debt$;s or redeema# %>es4 ,! rules 9
  subsec;n #bef7#f7 >e simil> 6! rules 9
  subsec;n #bef7#c71 except t ! 3troll$
  corpor,n is deem$ n 6be 3troll$ 0!
  p]son or "pn]%ip : 3trols1 directly or
  9directly 9 any mann] :at"e1 !
  corpor,n 7ref]r$ 6in ? p>agraph z 8!
  3troll]07 r ?an deem$ n 6be associat$
  7z is ! case 9 subsec;n #bef7#c77 )!
  3troll]4 ,subsec;n #bef7#f7 cd apply1
  = example1 ": a manufactur+ corpor,n
  e/abli%es a d1l]%ip 9 ano!r corpor,n
  &1 "u ! t]ms (! f9anc+ >range;t1 !
  op]ator or d1l] w n acquire active
  3trol (! d1l]%ip corpor,n until c]ta9
  f9ancial oblig,ns 6! manufactur+   #bj
        ,,it-#fd;,r#d73solidat$7     d#d
  corpor,n >e met4 ,9 ^! circum/.es1 &
  assum+ t ! o!r require;ts ( subsec;n
  #bef7#f7 >e met1 ? subsec;n deems !
  d1l]%ip corpor,n n 6be 3troll$ 0!
  manufactur+ corpor,n1 : results 9 !
  corpor,ns n 2+ associat$ ) ea* o!r
  0r1son (! >range;t4

                 ,3trol
    
            ,de ,jure ,3trol
    
      ,! g5]al te/ 7p>agraph #ac7
    
#ac4 ,if ! ref];e 63trol (a corpor,n is
  n a3ompani$ 0! ^ws 8directly or
  9directly 9 any mann] :at"e10 s* 3trol
  m1ns de jure 3trol 7i4e41 3trol 9
  law74

  ,! g5]al te/ = de jure 3trol 0
  e/abli%$ 0! ,ex*equ] ,c\rt ( ,canada 9
  ,buck]field's ,limit$ et ;al4 v4
  ,,mnr1 #fd ,,dtc #ecja1            #ba
        ,,it-#fd;,r#d73solidat$7     e#d
  ,7#aifd7' ,,ctc #ejd1 6be :e!r !
  %>ehold] 5joys 8e6ective 3trol0 ov] !
  a6airs & =tunes (! corpor,n1 z
  manife/$ 9 ! [n]%ip ( s* a numb] (
  %>es z c>ries ) x ! "r 6a major;y (!
  votes 9 ! elec;n (! bo>d ( directors4
  ,! te/ 9 ,buck]field's 0 3firm$ 0!
  ,supreme ,c\rt ( ,canada 9 ,duha
  ,pr9t]s 7,we/]n7 ,ltd4 v4 ,! ,que51
  #ih ,,dtc #fccd1 ,7#aiih7' #c ,,ctc
  #cjc4 ,9 ,duha ,pr9t]s1 ! c\rt /at$ t
  9 det]m9+ :e!r e6ective 3trol exi/s1
  "o m/ 3sid]3
  7a7 ! corpor,n's gov]n+ /atute2
  7b7 ! %>e regi/] (! corpor,n2 &
  7c7 any specific or unique limit,n on
    ei ! major;y %>ehold]'s p[] 63trol !
    elec;n (! bo>d or ! bo>d's p[]
    6manage ! busi;s & a6airs (! -pany1
    z manife/$ 9 ei3
    7;i7 ! 3/at+ docu;ts (! corpor,n2 or
    7;ii7 any unanim\s %>ehold] agree;t4

                                     #bb
      ,vot+ p[] 6w9d up ! corpor,n   f#d
             7p>agraph #ad7
    
#ad4 ,a ref9e;t (! m1n+ ( de jure 3trol
  c 2 f.d 9 ,oakfield ,develop;ts
  7,toronto7 ,limit$ v4 ,,mnr1 #ga ,,dtc
  #eage1 ,7#aiga7' ,,ctc #bhc4 ,9 t
  case1 an 89side gr\p0 ( %>ehold]s [n$
  all ! corpor,n's -mon %>es & ano!r
  gr\p [n$ all ! corpor,n's pref]r$ %>es
  ) ea* gr\p hold+1 9 a7regate1 an equal
  numb] ( votes4 ,! pref]r$ %>es 7 issu$
  af ! -mon %>es & 7 5titl$ on w9d+ up
  only 6! am.t pd 6acquire ! %>es plus a
  #aj@3p premium4 ,! ,supreme ,c\rt (
  ,canada held 9 ,oakfield t 3trol (!
  corpor,n rema9$ )! -mon %>ehold]s :o
  _h ! p[] 6w9d up ! corpor,n & 6rcv all
  ! capital & surplus except ! fix$ am.t
  paya# 6! pref]r$ %>ehold]s4 7,see al !
  ,supreme ,c\rt ( ,canada's deci.n 9 ,!
  ,que5 v4 ,imp]ial ,g5]al ,prop]ties
  ,limit$1 #he ,,dtc #eejj1 ,7#aihe7' #b
  ,,ctc #bii47
                                     #bc
         ,b5eficial [n]s ( %>es      g#d
             7p>agraph #ae7
    
#ae4 ,! [n]s ( %>es (a corpor,n >e
  3sid]$ 6be ^? p]sons :o >e ! b5eficial
  [n]s ( s* %>es4 ,? is ! case ev5 if !
  %>es >e regi/]$ 9 ! corpor,n's %>e
  regi/] 9 ! "n ( ano!r p]son or p]sons
  s* z a nom9ee or b>e tru/ee4 7,see al
  p>agraph #cb 3c]n+ a %>e held 0a
  tru/ee47
--------------------------------------#e
           ,e6ect ( ca/+ vote
             7p>agraph #af7
    
#af4 ,": ! vot+ %>es (a corpor,n >e
  divid$ ev5ly 2t two p]sons1 ! fact t !
  *airp]son (a %>ehold]'s meet+ may h !
  "r 6ca/ a decid+ vote does n give t
  p]son de jure 3trol (! corpor,n ": !
  decid+ vote is 3f]r$ on t p]son z
  *airp]son (! meet+ & n 0[n]%ip ( vot+
  %>es 7see ,a>on's 7,pr9ce ,alb]t7
  ,ltd4 et ;al4 v4 ,,mnr1 al "kn z
  ,alli$ ,busi;s ,sup]vi.ns ,ltd4    #bd
        ,,it-#fd;,r#d73solidat$7     a#e
  v4 ,,mnr1 #ff ,,dtc #ebdd1 ,7#aiff7'
  ,,ctc #ccj 7,ex4 ,ct47--3firm$ 9 ,,mnr
  v4 ,dwork9 ,furs 7,pembroke7 ,ltd41
  #fg ,,dtc #ejce1 ,7#aifg7' ,,ctc #ej
  7,s4,c4,c4774 7,h["e1 ! hold+ (a 8ca/+
  vote0 9 ! abv circum/.es may 3/itute
  de facto 3trol z def9$ 9 subsec;n
  #bef7#e.a747

     ,9direct 3trol 7p>agraph #ag7
    
#ag4 ,x is possi# =a p]son 6h de jure
  3trol ov] a corpor,n )\t [n]%ip ( any
  ( xs %>es if t p]son 3trols "o or m
  o!r corpor,ns :1 s+ly or am;g !m1 h
  vot+ 3trol (! f/-m5;n$ corpor,n4 ,=
  example1 if ;,y 3trols ,corpor,n ;,a :
  9 turn 3trols ,corpor,n ;,b1 !n ;,y al
  3trols ,corpor,n ;,b4 ,simil>ly1 if
  ,corpor,n ;,p 3trols ,corpor,ns ;,m &
  ;,n :1 2t !m1 [n m ?an #ej p] c5t (!
  vot+ %>es ( ,corpor,n ;,x1 !n
  ,corpor,n ;,p 3trols ,corpor,n ;,x1 &
  all f\r (! corpor,ns >e            #be
        ,,it-#fd;,r#d73solidat$7     b#e
  associat$ ) ea* o!r4 ,see ,v9el&
  ,qu>ries & ,cru%$ ,/"o ,limit$ v4
  ,,mnr1 #ff ,,dtc #ejib1 ,7#aiff7'
  ,,ctc #fi 7a6irm$ f ! b5* )\t writt5
  r1sons 0! ,supreme ,c\rt ( ,canada1
  #fg ,,dtc #ebhc74 7,dep5d+ on ! facts
  9 ! "picul> situ,n1 p>agraph
  #bef7#a.b77d7 may al result 9 !
  corpor,ns 2+ associat$ ) ea* o!r--see
  p>agraph #cj47

       ,e6ect ( special provi.ns
             7p>agraph #ah7
    
#ah4 ,z 9dicat$ 9 p>agraph #ac1 x is al
  nec 6take 963sid],n ! foll[+3
  --special provi.ns 9 ! 3/at+ docu;ts
    (a corpor,n1 s* z xs lrs pat5t1
    >ticles ( 9corpor,n or by-laws2 or
  --unanim\s %>ehold] agree;ts sanc;n$
    0! relevant legisl,n4
  
  ,= example1 ! >ticles ( 9corpor,n (a
  corpor,n may provide t a mo;n      #bf
        ,,it-#fd;,r#d73solidat$7     c#e
  put 2f a meet+ (! %>ehold]s w fail
  un.s x rcvs ! unanim\s 3s5t ( all !
  [n]s ( vot+ %>es4 ,9 ^! circum/.es1 !
  p]son or p]sons hold+ ! major;y (!
  vot+ %>es c 2 sd 6h de jure 3trol ov]
  ! corpor,n only if t p]son or p]sons
  [n all ! vot+ %>es4 7,h["e1 ev5 if !
  major;y %>ehold] or %>ehold]s 9 ! abv
  example did n [n all ! vot+ %>es1 !y
  cd / 2 deem$ 63trol ! corpor,n 0m1ns
  (! fair m>ket value te/ 9 p>agraph
  #bef7#a.b77c71 z 4cuss$ 9 p>agraph
  #bh47

      ,de ,facto ,3trol--,subsec;n
     #bef7#e.a7 7p>agraphs #ai-bc7
    
#ai4 ,if ! ref];e 63trol (a corpor,n is
  a3ompani$ 0! ^ws 8directly or
  9directly 9 any mann] :at"e10 s* 3trol
  5compasses bo? de jure 3trol 7z 4cuss$
  9 p>agraphs #ac 6#ah7 & de facto 3trol
  7i4e41 3trol 9 fact74 ,=! purposes (!
  ,act1 a corpor,n is 3sid]$         #bg
        ,,it-#fd;,r#d73solidat$7     d#e
  0subsec;n #bef7#e.a7 6be 83troll$1
  directly or 9directly 9 any mann]
  :at"e10 ": ano!r corpor,n1 p]son or
  gr\p ( p]sons 7ref]r$ 6in ? p>agraph1
  p>agraphs #bj & #be z ! 83troll]07 has
  any direct or 9direct 9flu;e t1 if
  ex]cis$1 wd result 9 3trol 9 fact (!
  corpor,n4
#bj4 ,subsec;n #bef7#e.a7 fur!r
  provides1 h["e1 t ! corpor,n % n 2
  3sid]$ 6be 3troll$1 directly or
  9directly 9 any mann] :at"e1 0!
  3troll] ": ! corpor,n &! 3troll] >e
  d1l+ at >m's l5g? &! 3troll]'s 9flu;e
  is deriv$ f an agree;t or >range;t s*
  z a fran*ise1 lic;e1 l1se1 4tribu;n1
  supply or manage;t agree;t--i4e41 a
  busi;s agree;t or >range;t--! ma9
  purpose ( : is 6gov]n ! rel,n%ip 2t !
  "pies reg>d+ ! mann] 9 : a busi;s
  c>ri$ on 0! corpor,n is 6be 3duct$4
  ,?us1 = example1 a fran*ise agree;t or
  l1se : provides 6! fran*is] or lessor
  a m1sure ( 3trol ov] ! products    #bh
        ,,it-#fd;,r#d73solidat$7     e#e
  sold 0! corpor,n or ! h\rs dur+ : x
  3ducts xs busi;s1 wd n 0xf result 9 !
  fran*is] or lessor hav+ de facto 3trol
  (! corpor,n4
#ba4 ,de facto 3trol goes 2y de jure
  3trol & 9cludes ! abil;y 63trol 8in
  fact0 0any direct or 9direct 9flu;e4
  ,de facto 3trol may exi/ ev5 )\t !
  [n]%ip ( any %>es4 ,x c take _m =ms1
  e4g41 ! abil;y (a p]son 6*ange ! bo>d
  ( directors or rev]se xs deci.ns1
  6make alt]native deci.ns 3c]n+ ! ac;ns
  (! corpor,n 9 ! %ort1 m$ium or l;g
  t]m1 6directly or 9directly t]m9ate !
  corpor,n or xs busi;s1 or 6appropriate
  xs pr(its & prop]ty4 ,! exi/;e ( any
  s* 9flu;e1 ev5 if x is n actu,y
  ex]cis$1 wd 2 su6ici5t 6result 9 de
  facto 3trol4
#bb4 ,! mo;t :5 ! 9flu;e m/ exi/1 =!
  purposes (! de facto 3trol te/1 dep5ds
  ^u ! 3text 9 : ! no;n ( 3trol is
  appli$4 ,= example1 9 ! case (! small
  busi;s deduc;n1 ": ! /atus (       #bi
        ,,it-#fd;,r#d73solidat$7     f#e
  8,canadian-3troll$ private corpor,n0
  7subsec;n #abe7#g77 m/ 2 ma9ta9$ "?\t
  ! ye>1 3trol w 2 exam9$ =! :ole ye> =
  : ! deduc;n is claim$4 ,9 ! case (!
  9ve/;t tax cr$it 7sec;n #abg.a71 !
  ref];e p]iod w 2 re/rict$ 6! ye> 9 : !
  all[a# exp5ses >e 9curr$4
#bc4 ,:e!r a p]son or gr\p ( p]sons c 2
  sd 6h de facto 3trol (a corpor,n1
  not)/&+ t !y d n leg,y 3trol m ?an #ej
  p] c5t ( xs vot+ %>es1 w dep5d on ea*
  factual situ,n4 ,! foll[+ >e "s g5]al
  factors t may 2 us$ 9 det]m9+ :e!r de
  facto 3trol exi/s3
--------------------------------------#f
  7a7 ! p]c5tage ( [n]%ip ( vot+ %>es
    7:5 s* [n]%ip is n m ?an #ej p] c5t7
    9 rel,n 6! hold+s ( o!r %>ehold]s2
  7b7 [n]%ip (a l>ge debt (a corpor,n :
    may 2come paya# on dem& 7un.s
    exempt$ 0subsec;n #bef7#c7 or 7#f77
    or a sub/antial 9ve/;t 9 retracta#
    pref]r$ %>es2
                                     #cj
        ,,it-#fd;,r#d73solidat$7     a#f
  7c7 %>ehold] agree;ts 9clud+ ! hold+
    (a ca/+ vote2
  7d7 -m]cial or 3tractual rel,n%ips (!
    corpor,n1 e4g41 economic dep5d;e on
    a s+le suppli] or cu/om]2
  7e7 posses.n (a unique exp]tise t is
    requir$ 6op]ate ! busi;s2 &
  7f7 ! 9flu;e t a family memb]1 :o is a
    %>ehold]1 cr$itor1 suppli]1 etc41 (a
    corpor,n1 may h ov] ano!r family
    memb] :o is a %>ehold] (! corpor,n4
  
  ,al? ! degree ( 9flu;e 9 7f7 is alw a
  "q ( fact1 close family ties 72t p>5ts
  & *n or 2t sp\ses7 especi,y l5d !mvs
  6! develop;t ( significant 9flu;es4
  ,g5],y1 ^! p]sons m/ demon/rate _!
  economic 9dep5d;e & autonomy 2f escap+
  presump;ns ( fact : apply 6relat$
  p]sons4 ,h["e1 ) respect 6sibl+s1 un.s
  ! facts 9dicate o!rwise1 g5],y "o
  sibl+ wd n 2 3sid]$ 6h 9flu;e ov]
  ano!r4
                                     #ca
        ,,it-#fd;,r#d73solidat$7     b#f
  ,9 a4i;n 6! g5]al factors describ$
  abv1 ! -posi;n (! bo>d ( directors &!
  3trol ( "d-to-"d manage;t & op],n (!
  busi;s wd 2 3sid]$4

             ,gr\p ( p]sons
    
          ,def9i;n--,p>agraph
      #bef7#a.b77a7 7p>agraph #bd7
    
#bd4 ,0virtue ( p>agraph #bef7#a.b77a71
  ! expres.n 8gr\p ( p]sons0 us$ 9
  subsec;n #bef7#a7 ref]s 6any two or m
  p]sons ea* ( :om [ns %>es (! capital
  /ock (! corpor,n4 ,once x is e/abli%$
  t a gr\p ( p]sons [ns a major;y (!
  vot+ %>es (a corpor,n 7ev5 ?\< "o
  p]son 9 ! gr\p may al"o 3trol !
  corpor,n z 4cuss$ 9 p>agraph #bf7 & t
  ! same gr\p al [ns a major;y (! vot+
  %>es (a second corpor,n1 t fact is
  su6ici5t 6make ! two corpor,ns
  associat$ ) ea* o!r4 ,? is ! case :e!r
  or n o!r -b9,ns ( %>ehold]s al     #cb
        ,,it-#fd;,r#d73solidat$7     c#f
  cd [n a major;y ( vot+ %>es 9 ei
  corpor,n 7see ! ,supreme ,c\rt (
  ,canada's deci.n 9 ,v9a-,rug 7,canada7
  limit$ v4 ,,mnr1 #fh ,,dtc #ejba1
  ,7#aifh7' ,,ctc #a74 ,"!=e1 =!
  purposes ( apply+ ! provi.ns (
  subsec;n #bef7#a71 any two or m
  p]sons1 relat$ or unrelat$1 may 2
  id5tifi$ z a gr\p ( p]sons1 )\t 3sid]+
  :e!r ! memb]s (! gr\p act 9 3c]t
  63trol ! corpor,n4

         ,applic,n ( ,p>agraph
      #bef7#a.b77a7 7p>agraph #be7
    
#be4 ,! exi/;e ( de facto 3trol "u
  subsec;n #bef7#e.a71 z 4cuss$ 9
  p>agraphs #ai-bc1 does n require t !
  3troll] [n any %>es 9 ! corpor,n 2+
  3sid]$4 ,"!=e1 ! def9i;n ( 8gr\p (
  p]sons0 9 p>agraph #bef7#a.b77a7 is
  re/rict$ 9 xs applic,n 6subsec;ns
  #bef7#a7 to 7#e7 & does n apply =!
  purposes ( subsec;n #bef7#e.a74    #cc
         ,simultane\s ,3trol (a      d#f
          ,corpor,n--,p>agraph
      #bef7#a.b77b7 7p>agraph #bf7
    
#bf4 ,p>agraph #bef7#a.b77b7 provides t
  a corpor,n c 2 3sid]$ 6be 3troll$ 0a
  p]son or "picul> gr\p ( p]sons not)/&+
  t ! corpor,n is al 3troll$ or deem$
  6be 3troll$ 0ano!r p]son or gr\p (
  p]sons4 ,?us1 if ,mr4 ;,x 3trols a
  corpor,n de jure & ,mr4 ;,y 3trols !
  same corpor,n de facto1 ! corpor,n is
  3sid]$1 0virtue ( p>agraph
  #bef7#a.b77b71 6be 3troll$ 0ea* ( ,mr4
  ;,x & ,mr4 ;,y4 ,p>agraph
  #bef7#a.b77b7 al provides t if a gr\p
  ( p]sons [ns %>es (! capital /ock (a
  corpor,n1 ! fact t an 9dividual memb]
  (! gr\p1 al"o1 [ns 5 %>es 63trol !
  corpor,n w n alt] ! fact t ! gr\p al
  3trols ! corpor,n4



                                     #cd
        ,,it-#fd;,r#d73solidat$7     e#f
,example
  ,mr4 ;,a
    ,corpor,n ;,a3 #ea@3p
    ,corpor,n ;,b3 #di@3p
  ,mr4 ;,b
    ,corpor,n ;,a3 #di@3p
    ,corpor,n ;,b3 #ea@3p

  ,mr4 ;,a & ,mr4 ;,b 3/itute a gr\p t
  3trols bo? ,corpor,n ;,a & ,corpor,n
  ;,b 0virtue ( p>agraph #bef7#a.b77b71
  ev5 ?\< ea* corpor,n is al 3troll$ 0"o
  p]son4 ,"!=e1 ! corpor,ns >e associat$
  ) ea* o!r "u p>agraph #bef7#a77b7 2c
  !y >e 3troll$ 0! same gr\p ( p]sons4

     ,3trol ( two corpor,ns 0relat$
        p]sons or relat$ gr\ps (
     p]sons--p>agraphs #bef7#a77c71
       7d7 & 7e7 7p>agraphe #bg7
    
#bg4 ,p>agraphs #bef7#a77c71 7d71 & 7e7
  3ta9 rules t cause corpor,ns 6be
  associat$ ) ea* o!r if !y >e       #ce
        ,,it-#fd;,r#d73solidat$7     f#f
  3troll$1 directly or 9directly 9 any
  mann] :at"e1 0relat$ p]sons or relat$
  gr\ps ( p]sons & c]ta9 cross-[n]%ip
  te/s >e met4 ,=! m1n+ ( 8relat$
  p]sons01 see subsec;n #bea7#b74 ,! t]m
  8relat$ gr\p0 is def9$ 9 subsec;n
  #bea7#d7 6m1n a gr\p ( p]sons ea*
  memb] ( : is relat$ 6e o!r memb] (!
  gr\p4
--------------------------------------#g
  ,two corpor,ns >e associat$ ) ea* o!r
  "u p>agraph #bef7#a77c7 if ! foll[+
  3di;ns exi/3
  --,ea* corpor,n is 3troll$1 directly
    or 9directly 9 any mann] :at"e1 0a
    p]son4
  --,! p]son 3troll+ "o (! corpor,ns is
    relat$ 6! p]son 3troll+ ! o!r
    corpor,n4
  --,ei ( ^? two p]sons [ns at l1/ #be
    p] c5t (! issu$ %>es ( any class--
    o!r ?an a 8specifi$ class0 7? t]m is
    4cuss$ immly af ! f9al example 9 ?
                                     #cf
        ,,it-#fd;,r#d73solidat$7     a#g
    p>agraph7--(! capital /ock ( ea*
    corpor,n4
  
,example
  ,mr4 ;,x
    ,corpor,n ;,x3 #ajj@3p
    ,corpor,n ;,y3 #be@3p
  ,mr4 ;,y 7,mr4 ;,x's bro!r7
    ,corpor,n ;,y3 #ge@3p

  ,p>agraph #bef7#a77d7 provides a rule
  t is simil> 6! abv-m5;n$ rule "u
  p>agraph #bef7#a77c74 ,"u p>agraph
  #bef7#a77d71 two corpor,ns >e
  associat$ ) ea* o!r if ! foll[+ 3di;ns
  exi/3
  --,"o (! corpor,ns is 3troll$1
    directly or 9directly 9 any mann]
    :at"e1 0a p]son4
  --,t p]son3
    --is relat$ 6ea* memb] (a gr\p (
      p]sons : 3trols1 directly or
      9directly 9 any mann] :at"e1 ! o!r
      corpor,n2 &                    #cg
        ,,it-#fd;,r#d73solidat$7     b#g
    --[ns at l1/ #be p] c5t (! issu$
      %>es ( any class--o!r ?an a
      8specifi$ class0 74cuss$ 2l af !
      f9al example7--(! capital /ock ( t
      o!r corpor,n4
    
,example
    ,corpor,n ;,x3 #ajj@3p
    ,corpor,n ;,y3 #be@3p
  ,mr4 ;,y 7,mr4 ;,x's bro!r7
    ,corpor,n ;,y3 #be@3p
  ,mrs4 ;,z 7;,x's si/]7
    ,corpor,n ;,y3 #be@3p
  ,mrs4 ;,x 7;,x's sp\se7
    ,corpor,n ;,y3 #be@3p

  ,p>agraph #bef7#a77e7 provides ano!r
  simil> rule 6^? 4cuss$ abv4 ,"u
  p>agraph #bef7#a77e71 two corpor,ns >e
  associat$ ) ea* o!r if ! foll[+ 3di;ns
  exi/3
  --,ea* corpor,n is 3troll$1 directly
    or 9directly 9 any mann] :at"e1 0a
    relat$ gr\p4                     #ch
        ,,it-#fd;,r#d73solidat$7     c#g
  --,ea* memb] ( "o relat$ gr\p is
    relat$ 6all ! memb]s (! o!r relat$
    gr\p4
  --,"o or m p]sons :o >e memb]s ( bo?
    relat$ gr\ps [n1 9 total1 at l1/ #be
    p] c5t (! issu$ %>es ( any class--
    o!r ?an a 8specifi$ class0 74cuss$
    2l af ! example7--(! capital /ock (
    ea* corpor,n4
  
,example
  ,mrs4 ;,x
    ,corpor,n ;,x3 #ej@3p
  ,mr4 ;,x
    ,corpor,n ;,x3 #ej@3p
    ,corpor,n ;,y3 #be@3p
  ,mr4 ;,y 7;,x's bro!r7
    ,corpor,n ;,y3 #be@3p
  ,mrs4 ;,z 7;,x's si/]7
    ,corpor,n ;,y3 #ej@3p

  ,%>es (a 8specifi$ class0 z 4cuss$ abv
  >e def9$ 9 subsec;n #bef7#a.a7 & m/ h
  all ! foll[+ "*i/ics3              #ci
        ,,it-#fd;,r#d73solidat$7     d#g
  7a7 ,! %>es >e n 3v]ti# or ex*angea#4
  7b7 ,! %>es >e non-vot+4
  7c7 ,! divid5ds >e calculat$ z a fix$
    am.t or 0ref];e 6a fix$ p]c5tage (!
    fair m>ket value (! 3sid],n = : !
    %>es 7 issu$4
  7d7 ,! annual divid5d rate _c 9 any
    ev5t exce$ ! foll[+3
    7;i7 ": ! %>es 7 issu$ af #aihc1 !
      prescrib$ rate ( 9t]e/ at ! "t !
      %>es 7 issu$2 &
    7;ii7 ": ! %>es 7 issu$ 2f #aihd1 !
      rate ( 9t]e/ prescrib$ =! purposes
      ( subsec;n #afa7#a7 at ! "t ! %>es
      7 issu$4
  7e7 ,! %>es _c 2 redeem$1 c.ell$ or
    acquir$ = m ?an ! fair m>ket value
    (! 3sid],n = : ! %>es 7 issu$ plus
    any unpd divid5ds on s* %>es4
  
  ,! divid5ds on %>es (a specifi$ class
  ne$ n 2 cumulative4 ,fur!rmore1 if !
  divid5ds >e cumulative1 ! fact t !
  %>ehold]s =feit _! 5title;t 6a     #dj
        ,,it-#fd;,r#d73solidat$7     e#g
  "picul> divid5d--e4g41 2c ( corporate
  law 3/ra9ts or 2c ( 9su6ici5t pr(its
  or ca% fl[--w n prev5t ! %>es f
  qualify+ z a specifi$ class ( %>es4

  ,s9ce a %>e t is issu$ z a /ock
  divid5d is issu$ = no 3sid],n1 x _c
  qualify z a %>e (a specifi$ class 2c x
  _c satisfy "*i/ic 7e7 abv4
--------------------------------------#h
       ,a4i;nal rules t c det]m9e
      [n]%ip ( %>es1 or 3trol1 (a
                corpor,n
    
     ,deem$ ,3trol 0! ,fair ,m>ket
         ,value ,te/--,p>agraph
      #bef7#a.b77c7 7p>agraph #bh7
    
#bh4 ,=! purposes (! associ,n rules 9
  subsec;ns #bef7#a7 to 7#e71 p>agraph
  #bef7#a.b77c7 deems a p]son or gr\p (
  p]sons 63trol a corpor,n ": ! p]son or
  gr\p3
                                     #da
        ,,it-#fd;,r#d73solidat$7     a#h
  7a7 [ns %>es repres5t+ m ?an #ej p]
    c5t (! fair m>ket value ( all !
    issu$ & \t/&+ %>es (! capital /ock
    (a corpor,n2 or
  7b7 [ns -mon %>es repres5t+ m ?an #ej
    p] c5t (! fair m>ket value ( all !
    issu$ & \t/&+ -mon %>es (! capital
    /ock (! corpor,n4
  
  ,= purposes ( mak+ ? valu,n1 p>agraph
  #bef7#a.b77g7 provides t vot+ "rs % 2
  ignor$4 ,z well1 subsec;n #bef7#a.f7
  provides t %>es describ$ 7& dur+ !
  applica# "t ref]r$ to7 9 p>agraph 7e7
  (! def9i;n ( 8t]m pref]r$ %>es0 9
  subsec;n #bdh7#a71 & %>es (a 8specifi$
  class0 z def9$ 9 subsec;n #bef7#a.a7
  7see p>agraph #bg71 % 2 4reg>d$4





                                     #db
       ,deem$ ,[n]%ip ( ,%>es 0!     b#h
     8,look-,"?0 ,rules--,p>agraphs
          #bef7#a.b77d7 to 7f7
    
       ,9troduc;n 7p>agraph #bi7
    
#bi4 ,p>agraphs #bef7#a.b77d71 7e71 &
  7f7 provide rules t apply to 8look "?0
  corpor,ns1 "pn]%ips & tru/s4 ,! rules
  deem %>es [n$ 0a corpor,n1 "pn]%ip or
  tru/ 6be [n$ 0! %>ehold]s (! corpor,n
  7see p>agraph #cj71 ! memb]s (!
  "pn]%ip 7see p>agraph #ca7 or
  b5efici>ies (! tru/ 7see p>agraph
  #cb71 respectively4

         ,look+ "? a corpor,n--
        ,p>agraph #bef7#a.b77d7
            7p>agraphe #cj7
    
#cj4 ,": a corpor,n [ns 7or is deem$
  0subsec;n #bef7#a.b7 6[n7 %>es (a
  second corpor,n1 p>agraph
  #bef7#a.b77d7 deems ^? %>es 6be [n$
  0any %>ehold] (! f/ corpor,n 9     #dc
        ,,it-#fd;,r#d73solidat$7     c#h
  propor;n 6! fair m>ket value ( _!
  %>ehold+ 9 ! f/ corpor,n4 ,9 det]m9+ !
  fair m>ket value ( %>es (a corpor,n =
  purposes ( apply+ ! look-"? rules1 all
  issu$ & \t/&+ %>es (! capital /ock (!
  corpor,n >e deem$ 0p>agraph
  #bef7#a.b77g7 6be non-vot+4

,example
  ,mr4 ;,a
    ,opco #a3 #ajj@3p
    ,holdco3 #ajj@3p
    ,opco #b3 #be@3p
  ,mrs4 ;,a
    ,opco #b3 #ge@3p

  ,p>agraph #bef7#a.b77d7 deems ,mr4 ;,a
  6[n #be p] c5t ( ,opco #b4 ,z a
  result1 ,opco #a & ,opco #b >e
  associat$ ) ea* o!r "u p>agraph
  #bef7#a77c7 7see p>agraph #bg74


                                     #dd
         ,look+ "? a "pn]%ip--       d#h
        ,p>agraph #bef7#a.b77e7
             7p>agraph #ca7
    
#ca4 ,simil>ly1 ": %>es (a corpor,n >e !
  prop]ty ( 7or >e deem$ 0subsec;n
  #bef7#a.b7 6be [n$ by7 a "pn]%ip1
  p>agraph #bef7#a.b77e7 looks "? !
  "pn]%ip & deems ! %>es 6be [n$ 0!
  "pn]%ip's memb]s 9 propor;n 6_!
  respective 9come 9t]e/s 9 ! "pn]%ip4
  ,if bo? ! 9come & loss (! "pn]%ip 9 a
  fiscal p]iod >e nil1 s t a memb]'s
  9come 9t]e/ _c 2 det]m9$1 p>agraph
  #bef7#a.b77e7 fur!r provides t !
  memb]'s propor;nate 9come 9t]e/ is 6be
  det]m9$ z if ! "pn]%ip _h 9come (
  4#a1jjj1jjj 9 t p]iod4






                                     #de
        ,,it-#fd;,r#d73solidat$7     e#h
,example
  ,mr4 ;,a
    ,corpor,n ;,a3 #ajj@3p
    ,corpor,n ;,b3 #de@3p
  ,,abcd ,"pn]%ip
    ,corpor,n ;,b3 #dj@3p
  ,mr4 ;,e
    ,corpor,n ;,b3 #ae@3p

  ,assum+ ,mr4 ;,a1 ;,b1 ;,c & ;,d >e
  equal "pn]s 9 ,,abcd ,"pn]%ip1 ea* w 2
  deem$ 0p>agraph #bef7#a.b77e7 6[n #aj
  p] c5t (! %>es ( ,corpor,n ;,b4 ,"!=e1
  ,corpor,n ;,a & ,corpor,n ;,b w 2
  associat$ ) ea* o!r "u p>agraph
  #bef7#a77e7 2c bo? corpor,ns >e
  3troll$ 0,mr4 ;,a4

      ,look+ "? a tru/--,p>agraph
      #bef7#a.b77f7 7p>agraph #cb7
    
#cb4 ,p>agraph #bef7#a.b77f7 provides !
  look-"? rule = %>es (a corpor,n t >e
  [n$ 7or deem$ 0subsec;n            #df
        ,,it-#fd;,r#d73solidat$7     f#h
  #bef7#a.b7 6be [n$7 0a tru/4 ,x deems
  !
--------------------------------------#i
  %>es 6be [n$ 0b5efici>ies (! tru/ 7&
  possibly al 0a p]son f :om prop]ty 0
  rcvd 0! tru/74 ,! p]c5tage (! %>es t a
  "picul> b5efici>y is deem$ 6[n dep5ds
  on ! type ( tru/4 ,! g5]al rules >e z
  foll[s3
  7a7 ,": a b5efici>y's %>e ( 9come or
    capital (! tru/ is subject 6any
    4cre;n>y p[] 7s* a tru/ 2+ ref]r$
    6"haf z a 84cre;n>y0 tru/71 ea* s*
    b5efici>y is deem$ 6[n all ! %>es
    held 0! tru/4
  7b7 ,": ! tru/ is n a 4cre;n>y tru/1
    ea* b5efici>y is deem$ 6[n %>es 9
    propor;n 6! fair m>ket value ( t
    b5efici>y's b5eficial 9t]e/ 9 !
    tru/4
  7c7 ,an excep;n 6! rules 9 7a7 & 7b7
    o3urs ":3
  
                                     #dg
        ,,it-#fd;,r#d73solidat$7     a#i
    --! tru/ is a te/a;t>y tru/2
    --"o or m ( xs b5efici>ies 7ref]r$
      6"haf z ! 89itial 9come
      b5efici>ies07 >e 5titl$ 6rcv all !
      9come (! tru/ 2f ! date on : ! d1?
      ( "o or all ( !m has o3urr$ 7!
      84tribu;n date072 &
    --prior 6t date no o!r p]son 7e4g41
      a b5efici>y :o is solely a capital
      b5efici>y1 or a p]son :o w 2come
      an 9come b5efici>y only ^u !
      o3urr;e (! 4tribu;n date7 c rcv or
      obta9 ! use (! 9come or capital (!
      tru/4
    ,if all ^! 3di;ns exi/1 %>es held 0!
    tru/ >e deem$ 6be [n$ only 0! 9itial
    9come b5efici>ies 2f ! 4tribu;n
    date4 ,:e!r any "picul> 9itial 9come
    b5efici>y is deem$ 6[n all1 or only
    a propor;n (1 ! %>es w dep5d on :e!r
    ! tru/ is 4cre;n>y or n 4cre;n>y z
    describ$ 9 7a7 & 7b71 respectively4
    ,af ! 4tribu;n date1 ! rule 9 7a7 or
    7b71 z ! case may be1 applies    #dh
        ,,it-#fd;,r#d73solidat$7     b#i
    ) respect 6all ! b5efici>ies1 9clud+
    ^? t >e solely capital b5efici>ies4
  7d7 ,": a tru/ is "o ref]r$ 6in
    subsec;n #ge7#b7 (! ,act1 s* z a
    8rev].n>y0 tru/1 ! p]son f :om
    prop]ty (! tru/ 0 rcvd is al deem$
    6[n ! %>es4
  
  ,! result (! applic,n ( p>agraph
  #bef7#a.b77f7 is t m ?an "o p]son c 2
  deem$ 6[n ! same %>es at ! same "t4 ,9
  a4i;n1 p>agraph #bef7#a.b77f7 does n
  negate ! fact t ! %>es >e actu,y held
  0! tru/ees (! tru/4 ,?us1 3trol (a
  corpor,n1 ! major;y ( ^: vot+ %>es >e
  [n$ 0a tru/1 w re/ )! tru/ee or gr\p (
  tru/ees t c b9d ! tru/ 7see ,,mnr v4
  ,3solidat$ ,hold+ ,-pany ,limit$1 #gb
  ,,dtc #fjjg1 ,7#aigb7' ,,ctc #ah
  7,s4,c4,c4774



                                     #di
        ,,it-#fd;,r#d73solidat$7     c#i
,example
  ,mr4 ;,x
    ,corp4 ;,a3 #ajj@3p
    ,corp4 ;,b3 #be@3p
  ;,x's *n 7all ov] #ah ;yrs47
    ,corp4 ;,b3 b5efici>ies ,4cre;n>y
  ,tru/ #ge@3p
  ;,x's ,uncle
    ,corp4 ;,b3 sole tru/ee ,4cre;n>y
  ,tru/
    ,corp4 ;,c3 #ajj@3p

  ,s9ce ;,x's *n >e ! b5efici>ies (!
  4cre;n>y tru/1 !y >e ea* deem$
  0subp>agraph #bef7#a.b77f77ii7 6[n all
  (! %>es ( ,corpor,n ;,b t >e [n$ 0!
  tru/4 ,"!=e1 s9ce ea* "o ( ;,x's *n
  3trols ,corpor,n ;,b1 ,corpor,n ;,a &
  ,corpor,n ;,b >e associat$ ) ea* o!r
  "u p>agraph #bef7#a77c7 7see p>agraph
  #bg74 ,al1 s9ce ;,x's uncle is ! sole
  tru/ee (! tru/1 he w 3trol ,corpor,n
  ;,b4 ,"!=e1 ,corpor,n ;,b & ,corpor,n
  ;,c w 2 associat$ ) ea* o!r "u     #ej
        ,,it-#fd;,r#d73solidat$7     d#i
  p>agraph #bef7#a77b74 ,corpor,n ;,a &
  ,corpor,n ;,c w al 2 associat$ ) ea*
  o!r 0virtue ( subsec;n #bef7#b7
  7assum+ "o (! two excep;ns describ$ 9
  p>agraph #h does n apply74

     ,look+ "? a *a9 7p>agraph #cc7
    
#cc4 ,a p]son at ! top (a *a9 c 2 deem$
  6[n a propor;n (! %>es (a corpor,n at
  ! bottom (! *a91 0apply+ ! rules 9
  subsec;n #bef7#a.b7 sequ5ti,y f "o
  level (! *a9 6! next4 ,fur!rmore1 "! w
  2 simultane\s [n]%ip or deem$ [n]%ip (
  "s %>es 7or "s p]c5tage ( %>es7 (!
  corpor,n at ! bottom (! *a9 0di6]5t
  9dividuals1 corpor,ns1 "pn]%ips or
  tru/s at di6]5t levels (! *a94

,example
  ,corpor,n ;,y has only -mon %>es1
  #ie@3p ( : >e [n$ 0,corpor,n ;,x4

                                     #ea
        ,,it-#fd;,r#d73solidat$7     e#i
  ,corpor,n ;,x has only -mon %>es1
  #ie@3p ( : >e [n$ 0,"pn]%ip ;,,ab4 ,"u
  p>agraph #bef7#a.b77d71 ,"pn]%ip ;,,ab
  is deem$ 6[n #ij.be@3p 7i4e41 #ie@3p
  multipli$ 0#ie@3p7 (! %>es ( ,corpor,n
  ;,y4

  ,tru/ ;,a is a memb] ( ,"pn]%ip ;,,ab
  & is 5titl$ 6#ij@3p ( xs 9come4 ,"u
  p>agraph #bef7#a.b77e71 ,tru/ ;,a is
  deem$ 6[n #ha.bbe@3p 7i4e41 #ij@3p
  multipli$ 0#ij.be@3p7 (! %>es (
  ,corpor,n ;,y4

  ,corpor,n ;,a is ! sole b5efici>y (
  ,tru/ ;,a4 ,"u p>agraph #bef7#a.b77f71
  ,corpor,n ;,a is deem$ 6[n #ha.bbe@3p
  7i4e41 #ajj@3p multipli$ 0#ha.bbe@3p7
  (! %>es ( ,corpor,n ;,y4
-------------------------------------#aj
  ,corpor,n ;,a has only -mon %>es1
  #ge@3p ( : >e [n$ 0,mr4 ;,a4 ,"u
  p>agraph #bef7#a.b77d71 ,mr4 ;,a is
  deem$ 6[n #fj.iahge@3p 7i4e41      #eb
        ,,it-#fd;,r#d73solidat$7    a#aj
  #ge@3p multipli$ 0#ha.bbe@3p7 (! %>es
  ( ,corpor,n ;,y4

  ,"!=e1 9 a3ord.e )! pr9ciple 4cuss$ 9
  p>agraph #ag1 ,mr4 ;,a has de jure
  3trol ( ,corpor,n ;,y4

     ,p>5t ,deem$ 6,[n ,%>es ( ,*--
          ,subsec;n #bef7#a.c7
             7p>agraph #cd7
    
#cd4 ,subsec;n #bef7#a.c7 provides t
  %>es (a corpor,n [n$ 0a * "u ! age (
  #ah % 2 deem$ 6be [n$ 0a p>5t (! * =!
  purposes ( det]m9+ :e!r ! corpor,n is
  associat$ ) any o!r corpor,n t is
  3troll$1 directly or 9directly 9 any
  mann] :at"e1 0t p>5t or a gr\p t
  9cludes t p>5t4 ,an excep;n 6subsec;n
  #bef7#a.c7 is provid$ ": ! * manages !
  busi;s & a6airs (! corpor,n )\t a
  significant degree ( 9flu;e 0! p>5t4

                                     #ec
        ,,it-#fd;,r#d73solidat$7    b#aj
  ,! foll[+ example illu/rates ! op],n
  (! look-"? rules 9 p>agraph
  #bef7#a.b77f7 7see p>agraph #cb7 9
  3junc;n )! rules 9 subsec;n
  #bef7#a.c74

,example
  ,corpor,n ;,a is 3troll$ 0,mr4 ;,x &
  ,corpor,n ;,b is 3troll$ 0an 9t] vivos
  tru/ =! b5efit ( 8 two *n :o >e "u #ah
  ye>s ( age4 ,! *n >e 9come & capital
  b5efici>ies (! tru/4 ,! provi.ns (
  p>agraph #bef7#a.b77f7 w apply 6deem !
  *n 6[n ! %>es ( ,corpor,n ;,b4 ,s9ce !
  provi.ns ( p>agraph #bef7#a.b77f7 >e
  applica# =! purposes ( subsec;ns
  #bef7#a7 to 7#e71 subsec;n #bef7#a.c7
  wd !n apply 6deem ,mr4 ;,x 6[n ^? %>es
  deem$ 6be [n$ 0! *n & ?us ,corpor,n
  ;,a & ,corpor,n ;,b wd 2 associat$ )
  ea* o!r "u p>agraph #bef7#a77b7 2c !y
  >e 3troll$ 0! same p]son1 ,mr4 ;,x4

                                     #ed
       ,op;ns or ,"rs--,subsec;n    c#aj
               #bef7#a.d7
    
      ,e6ect ( op;n 7p>agraph #ce7
    
#ce4 ,subsec;n #bef7#a.d7 provides two
  special rules1 =! purposes (! associ,n
  rules1 : deem a p]son1 or a "pn]%ip 9
  : ! p]son has an 9t]e/ 7! 8"pn]%ip071
  6[n %>es (a corpor,n 9 : ! p]son or
  "pn]%ip holds c]ta9 op;ns or "rs4

  ,"u ! f/ rule--: is 9 p>agraph
  #bef7#a.d77a7--if ! p]son or "pn]%ip
  has a "r1 "u a 3tract1 9 equ;y or
  o!rwise1 6acquire %>es 9 a corpor,n or
  63trol ! vot+ "rs ( %>es 9 a corpor,n1
  ! %>es >e deem$ 6be issu$ & \t/&+ &
  6be [n$ 0! p]son or "pn]%ip4

  ,"u ! second rule--: is 9 p>agraph
  #bef7#a.d77b7--if ! p]son or "pn]%ip
  has a "r 6cause a corpor,n 6redeem1
  acquire or c.el %>es ( xs capital /ock
  [n$ 0o!r %>ehold]s1 ! p]son or     #ee
        ,,it-#fd;,r#d73solidat$7    d#aj
  "pn]%ip is deem$ 6h ! same posi;n 9
  rel,n 63trol (! corpor,n & [n]%ip (
  %>es ( xs capital /ock z if ! %>es 7
  redeem$1 acquir$ or c.ell$ 0!
  corpor,n4

  ,nei p>agraph #bef7#a.d77a7 nor
  #bef7#a.d77b7 applies1 h["e1 ) respect
  6a "r t is n ex]cisa# until ! d1?1
  bankruptcy or p]man5t 4abil;y ( an
  9dividual4 ,= example1 p>agraph
  #bef7#a.d77a7 wd n apply 6a "r t !
  p]son or "pn]%ip has "u a survivor%ip
  agree;t 6acquire %>es (a corpor,n4

           ,3v]ti# securities
             7p>agraph #cf7
    
#cf4 ,if bonds1 deb5tures or pref]r$
  /ock (a corpor,n >e 3v]ti# 96vot+
  %>es1 subsec;n #bef7#a.d7 may apply 2c
  (! 8"r0 (! [n]s ( ^? securities 6make
  ! 3v].n4 ,h["e1 :e!r x w 2 appli$ c
  dep5d ^u _! 4tribu;n4 ,?us1 if     #ef
        ,,it-#fd;,r#d73solidat$7    e#aj
  s* securities h be5 issu$ 6! g5]al
  public & h wide 4tribu;n1 !y may usu,y
  2 ignor$4 ,h["e1 if l>ge numb]s ( !m
  >e 3c5trat$ 9 ! h&s (1 say1 f\r or
  five p]sons1 ! situ,n w 2 exam9$ 2c !y
  may 2 us$ z a device s t ! r1l 3trol
  (! corpor,n w n 2 app>5t simply f an
  exam9,n (! %>ehold+s4 ,a simil> situ,n
  c exi/1 al1 :5 a p]son has a "r 9 "s
  o!r =m 6subscribe = vot+ %>es4

           ,buy-sell agree;ts
             7p>agraph #cg7
    
#cg4 ,al? ! ^w+ 9 subsec;n #bef7#a.d7
  may 2 broad 5 69clude alm any buy-sell
  agree;t1 ? subsec;n w n norm,y 2
  appli$ solely 2c (3
  --a 8"r ( f/ refusal02 or
  --a 8%otgun >range;t0 7i4e4 an
    >range;t "u : a %>ehold] (f]s
    6pur*ase ! %>es ( ano!r %>ehold] &!
  
                                     #eg
        ,,it-#fd;,r#d73solidat$7    f#aj
    o!r %>ehold] m/ ei a3ept ! (f] or
    pur*ase ! %>es [n$ 0! (f]+ "py7
  
  3ta9$ 9 a %>ehold] agree;t4

       ,simultane\s 3trol & deem$
          3trol 7p>agraph #ch7
    
#ch4 ,if subsec;n #bef7#a.d7 does apply1
  x is possi# = ea* ( two sep>ate &
  unrelat$ p]sons 6be reg>d$1 =!
  purposes (! ,act1 z hav+ 3trol (! same
  corpor,n at ! same "t4 ,= example1 "o
  p]son cd h 3trol 0m1ns ( direct [n]%ip
  ( %>es &! o!r cd h 3trol z a result (!
  applic,n ( "o (! rules 9 subsec;n
  #bef7#a.d74 ,? provi.n prev5ts a p]son
  :o re,y 3trols a corpor,n f giv+ !
  appe>.e ( dive/+ 3trol by 8sell+0 !
  3troll+ %>es 6"s o!r p]son :ile reta9+
  an op;n 6repur*ase !m4

  ,subsec;n #bef7#a.d7 does n d5y t
  actual 3trol is held 0! p]son :o   #eh
        ,,it-#fd;,r#d73solidat$7    g#aj
  holds x4 ,if x did s1 x wd 2 possi# =a
  p]son or o!r 5t;y : 3trols a corpor,n
-------------------------------------#aa
  6give ! appe>.e ( dive/+ xf ( 3trol
  0giv+ 6"s o!r p]son or o!r 5t;y an
  op;n t w n"e 2 ex]cis$4

,example
  ,mr4 ;,s has actual 3trol ( ,corpor,ns
  ;,a & ;,x4

  ,mr4 ;,j1 :o 3trols ,corpor,n ;,y1 has
  an op;n 6pur*ase f ,mr4 ;,s1 dur+ 8
  life"t or f 8 e/ate1 ! 3troll+ %>es 9
  ,corpor,n ;,a4

  ,9 ^! circum/.es1 subsec;n #bef7#a.d7
  deems ,mr4 ;,j 6h 3trol ( ,corpor,n
  ;,a b does n d5y ,mr4 ;,s ! actual
  3trol ( x4

  ,z a result3
  --,corpor,ns ;,a & ;,x >e relat$ 7see
    subp>agraph #bea7#b77c77;i77 &   #ei
        ,,it-#fd;,r#d73solidat$7    a#aa
    >e deem$ n 6d1l ) ea* o!r at >m's
    l5g? 7see p>agraph #bea7#a77c772
  --,corpor,ns ;,a & ;,y >e relat$ 7see
    subp>agraph #bea7#b77c77;i77 & >e
    deem$ n 6d1l ) ea* o!r at >m's l5g?
    7see p>agraph #bea7#a77a772
  --,corpor,ns ;,x & ;,y >e relat$ 7see
    subsec;n #bea7#c77 & >e deem$ n 6d1l
    ) ea* o!r at >m's l5g? 7see p>agraph
    #bea7#a77a772 &
  --all ?ree corpor,ns >e associat$ )
    ea* o!r "u ! provi.ns ( sec;n #bef
    7see p>agraphs #b & #h74
  
  ,if1 h["e1 ,mr4 ;,j's op;n _h be5
  ex]cisa# only af ,mr4 ;,s's d1?1
  bankruptcy or p]man5t 4abil;y1 ,mr4
  ;,j wd n 2 deem$ 6h 3trol ( ,corpor,n
  ;,a1 2c (! excep;ns 9 subsec;n
  #bef7#a.d71 9 : case only ,corpor,ns
  ;,a & ;,x wd 2 associat$ ) ea* o!r4


                                     #fj
         ,simultane\s ,3trol at     b#aa
     ,di6]5t ,levels (a ,corporate
     ,*a9--,subsec;ns #bef7#f.a7 &
         7#f.b7 7p>agraph #ci7
    
#ci4 ,x is possi# = "! 6be simultane\s
  [n]%ip (! same %>es (a corpor,n1 or
  simultane\s 3trol (! corpor,n1 0di6]5t
  p]sons or gr\ps ( p]sons 9 ! mann]
  describ$ 9 p>agraph #bf1 #cd or #ch4

  ,9 a4i;n1 9 a situ,n 9volv+ a
  corporate *a9 7e4g41 ": ! %>es (a
  corpor,n >e held 0"o or m o!r
  corpor,ns ! %>es ( :1 9 turn1 >e held
  0"o or m o!r corpor,ns71 "! c 2
  simultane\s [n]%ip (! same %>es (!
  corpor,n at ! bottom (! *a9 0di6]5t
  5tities at di6]5t levels (! *a9 9 !
  mann] describ$ 9 p>agraph #cc4
  ,fur!rmore1 de jure 3trol c exi/ at !
  top (! *a9 7see p>agraph #ag &! ref];e
  "!9 6! ,v9el& ,qu>ries case74 ,h["e1 9
  ,p>!non ,9ve/;ts ,limit$ v4 ,,mnr1 #ig
  ,,dtc #ecdc1 ,7#aiig7' #c ,,ctc    #fa
        ,,it-#fd;,r#d73solidat$7    c#aa
  #aeb1 ! ,f$]al ,c\rt ( ,app1l held t a
  "picul> corpor,n at ! bottom (a
  corporate *a9 0 3troll$ 0! corpor,n at
  ! top (! *a9 & n 0any 9t]m$iate
  corpor,n =! purposes ( det]m9+ :e!r !
  "picul> corpor,n 0 a ,canadian-3troll$
  private corpor,n4

  ,subsec;ns #bef7#f.a7 & 7#f.b71 : took
  e6ect = tax,n ye>s 2g9n+ af ,novemb]
  #aiii1 rev]se ! pr9ciple 9 ! ,p>!non
  case describ$ abv4 ,al? subsec;ns
  #bef7#f.a7 & 7#f.b7 apply = purposes
  (! associ,n rules 9 sec;n #bef1 !
  exi/+ rules 9 subsec;n #bef7#a.b7 >e
  su6ici5t1 9 mo/ cases1 6e/abli% 3trol
  0"o or m p]sons or gr\ps ( p]sons1 ?us
  5sur+ ! prop] applic,n (! associ,n
  rules4 ,h["e1 9 det]m9+ 3trol (a
  corpor,n =! purposes (! associ,n
  rules1 subsec;n #bef7#a.b7 & subsec;ns
  #bef7#f.a7 & 7#f.b7 %d 2 3sid]$4

                                     #fb
           ,bullet9 ,revi.ns         #ab
    
  ,s9ce ! issu.e ( ,,it-#fd;,r#d on
,augu/ #ad1 #bjja1 "! has be5 no revi.n
6p>agraphs #a 6#cf or p>agraphs #ch &
#ci4
  ,p>agraph #cg 0 modifi$ 6reflect !
revis$ ^w+ adopt$ 9 p>agraph #ag ( ,,it-
#dai;,r#b4 ,p>agraph #cg d1ls ) subsec;n
#bef7#a.d7 : is alm id5tical 6p>agraph
#bea7#e77b7 z 4cuss$ 9 p>agraph #ag (
,,it-#dai;,r#b4 ,7,octob] #ac1 #bjjd7'












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