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 Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
952375
XXXXXXXXXX Jim Wilson
(613) 957-2123
Attention: XXXXXXXXXX
October 23, 1995
Dear Sirs:
Re: U.S. Limited Liability Companies
This is in reply to your letter of August 25, 1995 in which you asked for the Department's views as to whether or not a limited liability company formed under Chapter 18, Subtitle II of Title 6 of the laws of Delaware ("Delaware LLC") may have more than one class of shares for purposes of the foreign affiliate rules contained in the Income Tax Act ("Act").
We are of the opinion that a Delaware LLC would be a corporation for purposes of the Act. If the Delaware LLC is a foreign affiliate pursuant to the definition of "foreign affiliate" in subsection 95(1) of the Act, a computation of its surplus accounts for purpose of the foreign affiliate regulations will be done in a manner similar to that of any other foreign affiliate.
Since the ownership of the Delaware LLC is not divided into units entitled "shares", in accordance with our administrative position set out in Interpretation Bulletin IT-392 entitled Meaning of the Term "Share", the Department would view the Delaware LLC as if it had capital stock of 100 issued shares. Each owner of a beneficial interest in the Delaware LLC will be considered to own a number of shares proportionate to his beneficial interest in the Delaware LLC.
We trust you will find the above comments of assistance.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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