11 November 1993 Memorandum (Tax Window, No. 30, p. 3, ¶2482)

Where a corporation (A) is owned equally by three other corporations (X, Y and Z) who do not deal with one another at arm's length and do not act in concert as a group to control A or a wholly-owned subsidiary (B), the corporation resulting from the amalgamation of A and B would not be related persons pursuant to s.251(3.1) because X, Y and Z did not, as a group, exercise control over A.

Where a corporation (A) is owned equally by three shareholders who deal with one another at arm's length and do not act in concert amalgamates with a wholly-owned subsidiary (B) before a butterfly reorganization of the amalgamated corporation occurs, the exemption in s. 55(3)(b)(ii) would not be available because the shareholders of A do not, as a group, exercise control over A, and the amalgamated corporation, A and B would not be related persons pursuant to s. 251(3.1).