Regulation 4800

Subsection 4800(2)

Paragraph 4800(2)(a)

Administrative Policy

2018 Ruling 2018-0752531R3 - Public corporation election 89(1)(c)(i)

Reg. 4800(2)(a)(i) considered to be satisfied when, in fact, none of the shares held by the insiders had ever been listed since the Pubco’s formation by amalgamation

Pubco was a corporation that was now closely held but was deemed to be a public corporation under s. 87(2)(ii) given that it resulted from the amalgamation of a public corporation and another predecessor. However, at no time since that amalgamation had any class of its shares qualified for distribution to the public, as described in Reg. 4800(2)(c), or been listed on a designated stock exchange in Canada. A subsidiary (Subco) had six non-resident minority Class B common shareholders. It was a taxable Canadian corporation that was neither a private corporation nor a public corporation.

Subject Transactions

As the final step in a plan of arrangement, Pubco amalgamated with Subco. On the amalgamation, the shares of Pubco in Subco were cancelled and all the other shareholdings were converted into shares of Amalco. At a time prior to the effective date of its amalgamation, Pubco filed an election in prescribed manner not to be a public corporation pursuant to subparagraph (c)(i) of the definition of “public corporation” in subsection 89(1) (the “Election”).


A. Pubco will cease to be a public corporation at the time it filed the election in prescribed manner, not to be a public corporation pursuant to s. (c)(i) of “public corporation” under s. 89(1).

B. S. 87(2)(ii) will not apply to deem Amalco to be a public corporation at the commencement of its first taxation year.

Comments in CRA Header

If a public corporation wishes to elect not to be a public corporation and, at the time of the election, its insiders do not own shares of a class that was publicly listed at any time after the corporation last became a public corporation, can it satisfy Regulation 4800(2)(a)?

Position: Yes … .

Reasons: The circumstances of this corporation are substantially similar to those in respect of which a favorable ruling was given in … 2015-0577141R3, following the liberal interpretation first taken in … 2000-0004783.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Public Corporation - Paragraph (c) - Subparagraph (c)(i) election could be made even though no shares had been listed/qualifed for distribution 237