CTF - 1990 Conference Report
QUESTION I 65
Acquisition of Control by a Group of Persons
Paragraph 256(7)(a) of the Act provides certain exceptions where control of a corporation would otherwise have been acquired, but only applies where shares are acquired by a "person" rather than a person or group of persons. Would this provision be applied where control is acquired by a group of persons acting in concert?
DEPARTMENT'S POSITION
As stated in our response to Question 66 at the 1987 Round Table, where there is an acquisition of shares of a corporation by more than one person, it is the position of Revenue Canada that those persons will be deemed by paragraph 256(7)(a) not to have acquired control of the corporation by virtue of such share acquisition if each of those persons is a person described in subparagraph 256(7)(a)(i). If each member of a group of persons acting in concert is not a person described in subparagraph 256(7)(a)(i), then subsection 256(7) of the Act would not apply.
Prepared by: S. Shinerock