A corporation incorporated under the Canada Business Corporations Act (Opco) was continued as a co-operative under the Co-operative Corporations Act (Ontario), so that a certificate of discontinuance and certificate of continuance were issued under each statute. On the continuance, each common share of Opco was “converted” pursuant to the articles of continuance into a share of the share capital of the co-operative, having the same paid-up capital. CRA provided rulings respecting:
- the continuance not resulting in a disposition by Opco of its assets;
- the absence of a deemed dividend under s. 84(1) having regard to the safe harbor in s. 84(1)(c);
- the s. 86(1) rollover applying to the conversion of the shares on the continuance; and
- no deemed dividend arising under s. 84(3) having regard to the rule in s. 84(5).