Bifalgorithm post · Un actionnaire vend un immeuble à sa société · A post-spinoff amalgamation may taint the spin-off

Spin-off Structure

Spin-off Structure (Un actionnaire vend un immeuble à sa société · A post-spinoff amalgamation may taint the spin-off) — "Suppose that a wholly owned Holdco of…

Ideas in this flowchart

  • Spin-off of Holdco’s 70% Subco shareholding and the resulting application of section 55
  • The individual’s wholly owned Holdco owns 100% of Opco and 70% of Subco
  • The remaining 30% of Subco is held by unrelated persons
  • The individual rolls a portion of his Holdco shares to Newco
  • Holdco rolls its 70% Subco shareholding to Newco in exchange for Newco shares
  • The cross-shareholdings are redeemed
  • The unrelated persons’ 30% shareholding remains unaffected
  • Sections 55(3)(a)(i) to (v) are not engaged
  • The section 55(3)(a) exemption applies
  • If Newco and Subco amalgamate as a final step
  • The unrelated persons receive shares of Amalco
  • Under section 55(3.01)(b), they are effectively deemed to have acquired a 30% interest in Newco
  • Section 55(3)(a)(ii) is triggered
Bifalgorithm
Sign up
Feed/

Spin-off Structure

No cover

Channel

Un actionnaire vend un immeuble à sa société

1 page

U
USR292600b83e2a
Ebook1w

"Suppose that a wholly owned Holdco of an individual owns 100% of Opco and 70% of Subco, with the remaining 30% held by unrelated persons. In order to spin-off the 70% shareholding:\n\nthe individual rolls a portion of his Holdco shares to a Newco;\n\nHoldco rolls its 70% shareholding to Newco in exchange for Newco shares; and\n\nthe cross-shareholdings are redeemed.\n\nGiven inter alia that the 30% shareholding of the unrelated persons is unaffected, none of ss. 55(3)(a)(i) to (v) are engaged, and the s. 55(3)(a) exemption applies.\n\nHowever if, as a final step, Newco and Subco amalgamate, s. 55(3)(a)(ii) instead will be triggered because the unrelated persons, by receiving shares of Amalco, will effectively be deemed under s. 55(3.01)(b) to have acquired a 30% interest in Newco."

Flowchart preview
👍
0
0 comments0 shares

Sign in to view and post comments.