Pursuant to s. 54 of a Business Corporations Act [see s. 54 of the OBCA] certificated securities (represented by share certificates) of a corporation are replaced with uncertificated securities (represented by electronic records), by way of a notice (a notice of shareholder interest) to each shareholder with the information required to be stated on a share certificate (a process known as dematerialization), or the corporation’s uncertificated securities or notices of shareholder interest, are replaced with share certificates. Furthermore, a shareholder, who has lost its share certificate and has signed a declaration of loss and indemnity, may receive a replacement share certificate or a notice of shareholder interest from the corporation.
CRA indicated that these processes would not in themselves trigger a disposition, stating:
It is our understanding that a share certificate or notice of shareholder interest is simply evidence of the ownership of a share (or shares). In addition, you have advised … that … there is no change in the capital structure of the Corporation, the number of outstanding shares, the number of shares held by any shareholder, or the interest, rights, or privileges attached to any share.
[Accordingly] …. the actions undertaken would not, in and of themselves, constitute a redemption, acquisition, or cancellation of any share of the Corporation, or otherwise result in a disposition of a share of the Corporation.