CRA treats the question, of whether the shrinking of a control group of a private company results in an acquisition of control, as one of fact

A group of related shareholders (A, B and C) collectively held 39% of the shares of Opco, an unrelated shareholder (D) held 25% and a second related group (E, F and G) held the balance of 36%. All seven shareholders acted in concert. In finding that a purchase of all the shares of the second family by the first four shareholders in proportion to their respective shareholdings "quite likely" would result in an acquisition of control of Opco, CRA indicated:

• The first family (A, B and C) thereby would end up with a majority (61%) of the shares, and such majority ownership by a related group "could represent a sufficient common link to indicate that a new group controlled Opco"
• Weight should also be given to the fact that 3 out of 7 holding a substantial (36%) interest ceased to be shareholders

It could be comforting that CRA did not treat this as a trivially easy question.

Neal Armstrong. Summary of 15 October 2014 T.I. 2014-0547551E5 F under s. 249(4).