Question

Astro Corp. is a Canadian controlled private corporation​ (CCPC) in the current taxation year. Which of the following is NOT a connected corporation for Astro​ Corp.?

A.

Tissot​ Ltd., a wholly owned subsidiary of Astro Corp.

B.

Exom​ Inc., a corporation resident in Ireland. Astro Corp. owns​ 2% of the voting shares of Exom​ Inc., and these shares have a fair market value equal to​ 2% of all of the shares of Exom Inc.

C.

Saturn​ Inc., a Canadian controlled private corporation. Astro Corp. owns​ 25% of the voting shares of Saturn Inc. and these shares have a fair market value equal to​ 25% of all of the shares of Saturn Inc.

D.

Pelatan​ Ltd., a Canadian controlled private corporation. Astro Corp. owns​ 55% of the voting shares of Pelatan Ltd. and these shares have a fair market value equal to​ 55% of all of the shares of Pelatan Ltd.

Answer 1

Answer: Option B ( Exom​ Inc., a corporation resident in Ireland is NOT a connected corporation for Astro​ Corp.)

Explanation :

Two corporations are called to be connected when one of the corporations owns at least 10% of the shares of the other corporation and those shares are worth more than 10% of the fair market value of all issued shares of that other corporation, usually referred to as at least 10% of vote and value. All the given options satisfy the conditions except option B i.e., Exom​ Inc., a corporation resident in Ireland.Therefore it is not a connected person.

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