2004 Ruling 2004-0084311R3 - Incorporating a Partnership -- summary under Subsection 245(4)

On the transfer of the assets of a partnership to a corporation ("Newco") in consideration for shares and a promissory note, for reasons of legal simplification the shares and note are issued in the respective names of the partners (based on their pro-rata share) instead of the name of the partnership, with such pro-rata interest then being distributed to the respective partners on the subsequent wind-up of the partnership under s. 85(3). A comment that this manner of issuing the shares and promissory notes did not invalidate the application of ss.85(2) and (3).