Income Tax Regulations

4800 (1) For the purposes of subparagraph (b)(i) of the definition public corporation in subsection 89(1) of the Act, the following conditions are prescribed in respect of a corporation other than a cooperative corporation (within the meaning assigned by section 136 of the Act) or a credit union:

• (a) a class of shares of the capital stock of the corporation designated by the corporation in its election or by the Minister in his notice to the corporation, as the case may be, shall be qualified for distribution to the public;

• (b) there shall be no fewer than

  • (i) where the shares of that class are equity shares, 150, and

  • (ii) in any other case, 300

  persons, other than insiders of the corporation, each of whom holds

  • (iii) not less than one block of shares of that class, and

  • (iv) shares of that class having an aggregate fair market value of not less than $500; and

• (c) insiders of the corporation shall not hold more than 80 per cent of the issued and outstanding shares of that class.

(2) For the purposes of subparagraph (c)(i) of the definition public corporation in subsection 89(1) of the Act, the following conditions are prescribed in respect of a corporation:

• (a) insiders of the corporation shall hold more than 90 per cent of the issued and outstanding shares of each class of shares of the capital stock of the corporation that

  • (i) was, at any time after the corporation last became a public corporation, listed on a designated stock exchange in Canada, or

  • (ii) was a class, designated as described in paragraph (1)(a), by virtue of which the corporation last became a public corporation;

• (b) in respect of each class of shares described in subparagraph (a)(i) or (ii), there shall be fewer than

  • (i) where the shares of that class are equity shares, 50, and

  • (ii) in any other case, 100

  persons, other than insiders of the corporation, each of whom holds

  • (iii) not less than one block of shares of that class, and

  • (iv) shares of that class having an aggregate fair market value of not less than $500; and

• (c) there shall be no class of shares of the capital stock of the corporation that is qualified for distribution to the public and complies with the conditions described in paragraphs (1)(b) and (c).

(3) Where, by virtue of an amalgamation (within the meaning assigned by section 87 of the Act) of predecessor corporations any one or more of which was, immediately before the amalgamation, a public corporation, shares of any class of the capital stock of any such public corporation that was

• (a) at any time after the corporation last became a public corporation, listed on a designated stock exchange in Canada, or

• (b) the class, designated as described in paragraph (1)(a), by virtue of which the corporation last became a public corporation,

are converted into shares of any class (in this subsection referred to as the “new class”) of the capital stock of the new corporation, the new class shall, for the purposes of subsection (2), be deemed to be a class, designated as described in paragraph (1)(a), by virtue of which the new corporation last became a public corporation.

(4) Any election under subparagraphs (b)(i) or (c)(i) of the definition public corporation in subsection 89(1) of the Act shall be made by filing with the Minister the following documents:

• (a) the form prescribed by the Minister;

• (b) where the directors of the corporation are legally entitled to administer the affairs of the corporation, a certified copy of their resolution authorizing the election to be made;

• (c) where the directors of the corporation are not legally entitled to administer the affairs of the corporation, a certified copy of the authorization of the making of the election by the person or persons legally entitled to administer the affairs of the corporation; and

• (d) a statutory declaration made by a director of the corporation stating that, after reasonable inquiry for the purpose of informing himself in that regard, to the best of his knowledge the corporation complies with all the prescribed conditions that must be complied with at the time the election is made.