Income Tax Regulations

4803 (1) In this Part,

block of shares

block of shares means, with respect to any class of the capital stock of a corporation,

• (a) 100 shares, if the fair market value of one share of the class is less than $25,

• (b) 25 shares, if the fair market value of one share of the class is $25 or more but less than $100, and

• (c) 10 shares, if the fair market value of one share of the class is $100 or more; (tranche d’actions)

block of units

block of units means, with respect to any class of units of a trust,

• (a) 100 units, if the fair market value of one unit of the class is less than $25,

• (b) 25 units, if the fair market value of one unit of the class is $25 or more but less than $100, and

• (c) 10 units, if the fair market value of one unit of the class is $100 or more; (tranche d’unités)

equity share

equity share has the meaning assigned by section 204 of the Act; (action à revenu variable)

insider of a corporation

insider of a corporation has the meaning that would be assigned by section 100 of the Canada Corporations Act, as it read on June 22, 2009, if the references in that section to “insider of a company”, “public company” and “equity shares” were read as references to “insider of a corporation”, “corporation” and “shares” respectively, and includes a person who is an employee of the corporation, or of a person who does not deal at arm’s length with the corporation, and whose right to sell or transfer any share of the capital stock of the corporation, or to exercise the voting rights, if any, attaching to the share, is restricted by

• (a) the terms and conditions attaching to the share, or

• (b) any obligation of the person, under a contract, in equity or otherwise, to the corporation or to any person with whom the corporation does not deal at arm’s length. (dirigeant d’une société)

(2) For the purposes of this Part, a class of shares of the capital stock of a corporation or a class of units of a trust is qualified for distribution to the public only if

• (a) a prospectus, registration statement or similar document has been filed with, and, where required by law, accepted for filing by, a public authority in Canada pursuant to and in accordance with the law of Canada or of any province and there has been a lawful distribution to the public of shares or units of that class in accordance with that document;

• (b) the class is a class of shares, any of which were issued by the corporation at any time after 1971 while it was a public corporation in exchange for shares of any other class of the capital stock of the corporation that was, immediately before the exchange, qualified for distribution to the public;

• (c) in the case of any class of shares, any of which were issued and outstanding on January 1, 1972, the class complied on that date with the conditions described in paragraphs 4800(1)(b) and (c); or

• (d) in the case of any class of units, any of which were issued and outstanding on January 1, 1972, the class complied on that date with the condition described in paragraph 4801(b).

(3) For the purposes of paragraphs 4800(1)(b), 4800(2)(b) and 4801(b), where a group of persons holds

• (a) not less than one block of shares of any class of shares of the capital stock of a corporation or one block of units of any class of a trust, as the case may be, and

• (b) shares or units, as the case may be, of that class having an aggregate fair market value of not less than $500,

that group shall, subject to subsection (4), be deemed to be one person for the purposes of determining the number of persons who hold shares or units, as the case may be, of that class.

(4) In determining under subsection (3) the persons who belong to a group for the purposes of determining the number of persons who hold shares or units, as the case may be, of a particular class, the following rules apply:

• (a) no person shall be included in more than one group;

• (b) no person shall be included in a group if he holds

  • (i) not less than one block of shares or one block of units, as the case may be, of that class, and

  • (ii) shares or units, as the case may be, of that class having an aggregate fair market value of not less than $500; and

• (c) the membership of each group shall be determined in the manner that results in the greatest possible number of groups.