Associated Companies

1. [pic 1]Clara Ltd. owns 55% of the shares of Catherine Ltd.

There is association between Clara and Caterine Ltd. since Clara has the majority of voting power (with 55% of the shares); in other words, Clara controls Catherine Ltd. ITA: 256(1)(a) applies.

1. [pic 2]Ms. Miriam owns 51% of the shares of Abigail Ltd. and 60% of the shares of Ethan Ltd.

Abigail Ltd and Ethan Ltd are associated since both corporations are controlled by the same person; therefore, ITA (1)(b) applies.

1. [pic 3]Ms. Irene and Mr. Mordechai each own 50% of the shares of Clare Ltd. In addition, they each own 50% of the shares of Philip Ltd. Ms. Irene and Mr. Mordechai are not related.

This case has two ways of analysis:

1. Looking at it individually one could conclude there is no association since neither Ms. Irene or Mr. Mordechai have absolute ownership, they need each other for decision making over both corporations.
2. Looking at it as a group of unrelated people, one would conclude there is association since two people have full control over both corporations, in this case ITA 256(1)(b) applies.

1. Mrs. Lyn owns 60% of the shares of Jay Ltd. and Mrs. Sarah owns the other 40%. Mrs. Lyn and Mrs. Sarah each own 50% of the shares of Alex Ltd. Mrs. Lyn and Mrs. Sarah are not related.[pic 4]

Jay Ltd. and Philip Ltd are associated since both are controlled by and unrelated group of persons; another way of analyzing this case would be one person has control over both corporations since Mrs. Lyn controls Jay Ltd (with 60% of shares) and has more that 25% of ownership of Philip in both cases ITA 256(1)(b) applies.  

1. [pic 5]Janna Ltd., Rayna Ltd. and Adam Ltd. each own 1/3 of the shares of Stan Ltd. Janna Ltd. and Rayna Ltd. each own 50% of the shares of Jonathan Ltd.

ITA 256(1)(e) would apply assuming that Janna Ltd. and Rayna Ltd. are related (owned by related people) since Janna Ltd and Rayna Ltd as a group control both Stand Ltd and Jonathan Ltd. (control test), they are related (related test) and both Janna Ltd and Rayna Ltd own more than 25% of share of Stand Ltd. (cross-ownership test)

ITA 256(1)(d) would apply assuming that Janna Ltd and Rayna Ltd. are not related, Janna Ltd. and Rayna Ltd have control over Jonathan Ltd. (decisions cannot be made without the other’s approval) which individually give them control, under this category the two corporation are not required to be related, finally each of them own no less than 25% of Stand Ltd.