Words and Phrases - "shareholder"

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22 November 2012 External T.I. 2012-0441781E5 F - Prohibited Investment - Cooperative

investor in cooperative holds shares and is shareholder

Before concluding that “for the purposes of the Act, a cooperative is a corporation, a share of the capital stock of a cooperative is a share and a member can be a shareholder,” CRA stated:

First, a cooperative is a legal person by virtue of section 3 of the Cooperatives Act, CQLR, c. C-67.2. In addition, under the definition of "corporation" in subsection 248(1), a "corporation" includes such a person. Accordingly, we are of the view that for the purposes of the Act, a cooperative is a corporation. Furthermore, the definition of "share" in subsection 248(1) provides that a share of the capital stock of a corporation includes a share of the capital of a cooperative corporation within the meaning of subsection 136(2). Finally, the definition of "shareholder" in subsection 248(1) includes a member or other person entitled to receive payment of a dividend. Consequently, we are of the view that a member of a cooperative holding a share of the capital stock entitled to receive a dividend is a shareholder for the purposes of the Act.

Words and Phrases
share shareholder
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 4900 - Subsection 4900(15) application to shares of cooperative 106
Tax Topics - Income Tax Act - Section 207.01 - Subsection 207.01(1) - Prohibited Investment - Paragraph (b) - Subparagraph (b)(i) share of cooperative can be a share of corporation for prohibited investment purposes 66

Indalex Ltd. v. The Queen, 86 DTC 6039, [1986] 1 CTC 219 (FCTD), aff'd 88 DTC 6053, [1988] 1 CTC 60 (FCA)

A "shareholder" does not include an affiliate that does not hold shares in the corporation.

Words and Phrases
shareholder