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.
Dear Sirs:
This is in reply to your letter of May 31, 1988 and further to the additional information received on July 26, 1988. You have asked if the Department would consider a societe en commandite par actions (SECPA) established under the law of Luxembourg to be a “corporation” for the purposes of paragraph 95(1)(d) of the Income Tax Act (the “Act”) and Interpretation Bulletin.
A SECPA is generally described as a partnership limited by shares or sometimes as a “silent corporation limited by shares: and it possess certain characteristics of both a corporation and a limited partnership as these exit in Canada. A SECPA consists of one or more general partners, who are jointly and severally liable, and a number of other participants as shareholders whose liability is limited to a predetermine contribution. The commentary provided by your firm indicates that a SECPA possesses a se-parate legal personality under the company law of Luxembourg. It is also treated as a body corporate and taxed as such under Luxembourg tax laws.
Based on the available information, we would conclude that a Luxembourg SECPA would be considered a foreign “corporation” for the purposes of paragraphs 95(1)(d) of the Act. We trust this opinion will be of assistance.
Principal Investors Reasons
- • Whether societe en commandite par actions in Luxembourg would be considered “corporations” for the purposes of 95(1)(d).
- • Yes. (as will SECPA's in France and Belgium)
248(1) definition of “corporation” says “includes” common law - central feature of a corp. is that it is a separate legal entity.
- • mode of analysis - determine characteristics of foreign group - determine whether it is a separate legal entity
: see legal opinion Apr 8/76 by S. Pustogorodsky
Note: It appears that for determination of interests of investors in
a SECPA we must treat interests of Gen Partner & Ltd. Partners
separately, that is, as 2 classes of shares.
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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