A non-resident corporation governed by a non-resident jurisdiction’s corporate law had issued share capital based only on the “nominal value” of its common shares, but with a share premium account from share issuances. It became resident in Canada through a change in its central management and control, and then continued under a provincial companies statute, with the issued share capital account and share premium account being relabelled as stated capital and contributed surplus, respectively, on the continuance. It then passed a resolution converting the newly-styled capital surplus account into further stated capital.
CRA ruled that resolution did not generate a s. 84(1) deemed dividend.