Principal Issues: A. Will the members holding membership units of the Dutch Cooperative (DC) be considered to hold "shares" for the purposes of the Act?
B. Will the BV be considered to have disposed of any of its property on its conversion to a DC?
C. Will the cancellation of the shares in the capital of BV on the Conversion in exchange for a membership interest in the DC occur on a tax-deferred basis for the purposes of the Act, pursuant to section 86? D. Does 85.1(3) of the Act apply to the transfer(s) by Holdco of the shares in the capital of the FAcos to DC? E. Does 85.1(3) of the Act apply to the transfer(s) by Newco of the shares in the capital of the FAcos to DC? F. Does 95(6) of the Act apply to the Conversion or the Transfers?
Position: A. Yes B. No C. Yes D. Yes E. Yes F. No
Reasons: A. As long as the DC is treated as a corporation, then the comments in paragraph 3 of IT-392 will apply such that the members of the DC will be considered to own "shares". B. There is no disposition of its property on the conversion from the BV to the DC since the DC is the same corporation as the BV. C. The criteria in 86(1) have been met. D. The criteria in 85.1(3) have been met. E. The criteria in 85.1(3) have been met.
F. Based on the facts and circumstances surrounding the proposed transactions, there is no reason that 95(6) should be triggered.