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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
RE: Request for Technical Interpretation Acquisition of Control
This is in response to your letter of January 18, 1993 dealing with the above-captioned subject.
The specific situation on which you request our views is described in your letter as follows:
"... assume party A owns all the shares of company B. Party A sells his shares of company B to company C in exchange for shares of company C. Because of the exchange ratios party A ends up owning a majority of company B (sic) (say 66 2/3%) and there is an acquisition of control of company C. However, does the Department consider that there has been an acquisition of control of company B...."
Our Views
In our view, in the situation you have described we would consider control of company B to have been acquired by company C, notwithstanding that after the completion of the transactions party A indirectly controls Company B. We have advised the Department of Finance of the issue raised in your letter.
The foregoing comments are given in accordance with the practice of providing non-binding opinions referred to in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990.
Yours truly,
for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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