Principal Issues:
(1) Does the exception in paragraph 15(2.4)(f) of the Act, to subsection 15(2) of the Act, apply to a loan from a corporation to an employee/shareholder, used to acquire previously publicly traded shares of the corporation, where the loan is not repayable until the shares acquired are sold, the borrower dies or their employment ends?
(2) Does subsection 15(2) of the Act apply to a loan made pursuant to an "oral" agreement?
(3) Does subsection 15(2) of the Act apply to a loan made to a non-resident shareholder?
(4) Can a promissory note be amended so that the requirements of paragraph 15(2.4)(f) of the Act are satisfied at the time the loan was made?
Position: (1) No. (2) Yes. (3) Yes. (4) No.
Reasons:
(1) The three criteria for repayment do not constitute bona fide arrangements for the repayment of the loan.