CRA applies a functional approach to determining the ownership of the “capital” of a non-share corporation

In response to an inquiry on the Crown corporation branch of the definition of a public institution in s. 125.7(1) of the CEWS rules, CRA first paraphrased the rules in ss. 149(1)(d) to (d.6) as well as referring to the deeming rule in s. 149(1.1), and then indicated that, in determining the ownership of the “capital” of a non-share corporation for these purposes, it would consider the following factors:

• the identity of members,
• the structure of the corporation,
• who exercises control over the financing, operation and direction of the corporation,
• who has the right to elect or change the board of directors or to reverse its decision,
• who can contribute capital and receive a distribution of capital,
• details regarding asset distribution on winding-up or dissolution and
• whether a person other than her Majesty in right of Canada, a province or a Canadian municipality has any right to acquire any capital of the corporation.

Neal Armstrong. Summary of 1 May 2020 External T.I. 2020-0846931E5 under s. 125.7(1) – public institution - (a).