What is the basis for the presumption that the three unrelated shareholders of a private corporation will act together to control the corporation, given that it can be demonstrated that no one individually controls the corporation and that the decision-making process is not deadlocked? What if there are 4 or 5 shareholders? CRA responded:
[Although] the CRA effectively presumes that the three shareholders are acting together to control the corporation and therefore form a controlling group … the CRA may consider that the three shareholders do not form a group of persons who control the corporation if it is demonstrated that there is no common bond or interest between the three shareholders or that they are not acting together for the purpose of controlling the corporation.
Whether a group of unrelated persons controls a corporation and, if so, the composition of that group, in situations where a private corporation has more than three unrelated shareholders, none of whom individually controls the corporation, is a question that the CRA generally determines after a review and analysis of all the facts, legal documents and circumstances … .