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Change in Control Question

 
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David Smith
Guest
PostPosted: Wed May 28, 2008 7:10 pm    Post subject: Change in Control Question Reply with quote
Hi Folks,

Situation:

-prescribed venture capital corporation (under reg 6700) makes investment in
CCPC through a convertible( to common shares) debenture which gives it
effective control of the CCPC.

-under 125(7) the status of the corporation does not change -it is still a
CCPC

Question -is there a change in control for income tax purposes?

-section 256 talks about the meaning of a change in control and 256(7) lists
the exceptions but this particular situation does not seem to be addressed.

Thanks for any help,


David S>



--

David E. Smith, CA
http://dsmithca.googlepages.com/home
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Anonymous User
Guest
PostPosted: Thu May 29, 2008 5:34 pm    Post subject: Re: Change in Control Question Reply with quote
On May 28, 9:10 am, "David Smith" <foo@localhost> wrote:
Quote:
Hi Folks,

Situation:

-prescribed venture capital corporation (under reg 6700) makes investment in
CCPC through a convertible( to common shares) debenture which gives it
effective control of the CCPC.

-under 125(7) the status of the corporation does not change -it is still a
CCPC

Question -is there a change in control for income tax purposes?

-section 256 talks about the meaning of a change in control and 256(7) lists
the exceptions but this particular situation does not seem to be addressed..

Thanks for any help,

David S

--

David E. Smith, CAhttp://dsmithca.googlepages.com/home


I'd think that subsection 256(5.1) would likely come into play here in
that we have control in fact, regardless of other factors. IT64R4 (13)
seems to support this.

....which implies that you have an unexpected year-end coming up? Smile
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David Smith
Guest
PostPosted: Fri May 30, 2008 11:52 pm    Post subject: Re: Change in Control Question Reply with quote
"Anonymous User" <anonymous.user@shaw.ca> wrote in message
news:a8a627b7-14ce-4d12-b84b-b68452a4709a@q27g2000prf.googlegroups.com...
On May 28, 9:10 am, "David Smith" <foo@localhost> wrote:
Quote:
Hi Folks,

Situation:

-prescribed venture capital corporation (under reg 6700) makes investment
in
CCPC through a convertible( to common shares) debenture which gives it
effective control of the CCPC.

-under 125(7) the status of the corporation does not change -it is still a
CCPC

Question -is there a change in control for income tax purposes?

-section 256 talks about the meaning of a change in control and 256(7)
lists
the exceptions but this particular situation does not seem to be
addressed.

Thanks for any help,

David S

--



I'd think that subsection 256(5.1) would likely come into play here in
that we have control in fact, regardless of other factors. IT64R4 (13)
seems to support this.

.....which implies that you have an unexpected year-end coming up? :)

Quote:
actually I posted before fully investigating various provincial venture
corporation acts-they do >not permit more than 49% of the votes to be
controlled by the investor VCC (unless there is a >solvency issue at hand)
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