29 January 2002 External T.I. 2001-0084805 - Limited Liability Corporation

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: whether New Hampshire LLC is a corporation for Canadian tax purposes

Position: yes

Reasons: provisions of New Hampshire legislation under which LLC is created was similar to those of states for which we have already provided this position

XXXXXXXXXX 2001-008480
D. Yuen
January 29, 2002

Dear XXXXXXXXXX:

Re: New Hampshire Limited Liability Company

We are writing in response to your letter dated May 16, 2001, wherein you requested our comments in respect of the tax status of a limited liability company ("LLC") created under the New Hampshire RSA (Revised Statutes Annotated), Chapter 304C (the "NHRSA").

Comments

1. We are of the opinion that a LLC formed under the NHRSA would be a corporation for purposes of the Income Tax Act (Canada) (the "Act").

2. In accordance with Interpretation Bulletin IT-392, the LLC is considered to have a capital stock consisting of 100 issued shares and each owner of a beneficial interest in the LLC is then considered to own a number of shares proportionate to his or her beneficial interest in the LLC. Each amount distributed on account of profits by the LLC to its owners will be considered dividends for purposes of the Act and the Regulations made thereunder.

3. If the LLC is treated as a partnership for the purposes of the United States Internal Revenue Code (the "Code") such that the shareholders ("partners") rather than the LLC are liable to tax under the Code on the income of the LLC, it will not be considered resident in the United States under paragraph 1 of Article 4 of the Canada-U.S. Income Tax Convention.

These comments are provided in accordance with the guidelines set out in paragraph 22 of IC 70-6R4 and are not considered binding on the CCRA.

Yours truly,

for Director
International and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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