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AIT805 Ch 12 Assignment Problems

AIT805 Ch 12 Assignment Problems - Chapter 12 Solution...

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Chapter 12 Solution 3 (Advanced) (A) A Ltd. and B Ltd. are associated [par. 256(1)( b )]. They are both controlled by the same group, i.e., Rachel and Monica. Rachel and Monica may be considered as a group controlling B Ltd., even though Rachel controls B Ltd. on her own also [spars. 256(1.2)( b )(i) and (ii)]. (B) A Ltd. and B Ltd. are associated [par. 256(1)( c )]. A Ltd. is controlled by Charlie. B Ltd. is controlled by Claudia. Charlie and Claudia are related. Charlie owns in respect of each of A Ltd. and B Ltd. not less than 25% of the issued shares of any class, other than a specified class. Charlie is deemed to own 80% of 40% = 32% of the shares of B Ltd. [par. 256(1.2)( d )]. (C) A Ltd. and B Ltd. are associated [par. 256(1)( d )]. B Ltd. is controlled by Bert. Bert is related to each member of a group of persons that control A Ltd. Bert owns not less than 25% of the issued common shares of A Ltd. Bert is deemed to own 1 / 3 of 100% = 33.3% of the shares of A Ltd. [par. 256(1.2)( e )].
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(D) A Ltd. and C Ltd. are associated [par. 256(1)( d )]. A Ltd. is controlled by Anne. Anne is related to each member of a group of persons that control C Ltd. Anne owns not less than 25% of the issued common shares of C Ltd. Anne is deemed to own 100% of 40% = 40% of the shares of C Ltd. [par. 256(1.2)( d )]. B Ltd. and C Ltd. are associated [par. 256(1)( d )]. B Ltd. is controlled by Barbara. Barbara is related to each member of a group of persons that control C Ltd. Barbara owns not less than 25% of the issued common shares of C Ltd. Barbara is deemed to own 100% of 40% = 40% of the shares of C Ltd. [par. 256(1.2)( d )]. Since A Ltd. and B Ltd. are not associated by any other provision, subsection 256(2) deems them to be associated because of their common association with C Ltd. However, if C Ltd. elects not to be associated with A Ltd. and B Ltd., then C Ltd. will be deemed to have a business limit of nil and all three corporations will be deemed not to be associated for purpose of section 125.
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(E) A Ltd. and B Ltd. are associated [par. 256(1)( b )]. They are both controlled by the same group, i.e., Brandon and Claire. Brandon and Claire may be considered as a group controlling B Ltd., even though Claire controls B Ltd. on her own also [spars. 256(1.2)( b )(i) and (ii)]. B Ltd. and C Ltd. are associated [par. 256(1)( b )]. They are both controlled by Claire. Since A Ltd. and C Ltd. are not associated by any other provision, subsection 256(2) deems them to be associated because of their common association with B Ltd. However, if B Ltd. elects not to be associated with A Ltd. and C Ltd., then B Ltd. will be deemed to have a business limit of nil and all three corporations will be deemed not to be associated for
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