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 XXX:
We are writing in response to your letter of December 2, 1982 wherein you requested our comments concerning subsection 85(1) elections where the transferee corporation cannot immediately issue the shares as part of the consideration for the transfer of property.
Our position is that an election will be accepted as valid provided the following conditions are met:
- 1. There is a binding agreement between the transferor and the transferee requiring the transferee to issue the shares in question.
- 2. The transferee takes immediate steps to issue the necessary shares (e.g. applying for supplementary letters patent or articles of amendment).
- 3. The shares are issued without delay when the transferee is authorized to do so.
If, for any reason, the transferee does not receive authorization to issue the shares, the election will be treated as invalid.
We trust these comments will be of assistance to you.
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© Her Majesty the Queen in Right of Canada, 1983
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© Sa Majesté la Reine du Chef du Canada, 1983
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