Ollenberger - Federal Court of Appeal finds that an "active business" need not be active

Valerie Miller J denied a business investment loss claimed by the taxpayer on a loan made to a Canadian-controlled private corporation which went bad, on the basis that the CCPC did not carry on its business in an "active" manner - so that its business did not qualify as an "active business" as required by the "small business corporation" definition.

In reversing her decision, Noël JA essentially found that this represented an improper departure from the "active business" definition in s. 248(1), which defines that term (outside the foreign affiliate context) to mean any business other than a specified investment business or a personal services business: there is no statutory requirement that an "active business" be active.

Scott Armstrong.  Summary of Ollenberger v. The Queen, 2013 FCA 74 under s. 248(1) - "small business corporation."