Question

Anderson Inc., BDO Ltd., and Copper Inc., are three Canadian controlled private corporations. The common share ownership is as follows:

Anderson Inc. John Anderson owns 100 percent of the common shares of this

Company.

BDO Ltd. John Anderson owns 30 percent of the common shares and his spouse,

Wilma Anderson, owns 10 percent of the common shares. Basil Copper owns 35

percent of the common shares and his spouse, Holly Copper, owns 25 percent of the

common shares. Holly Copper is John Anderson’s sister.

Copper Inc. Basil Copper and Holly Copper each own 50 percent of the common

shares of this Company.

Required Indicate which of the Companies described are associated.

Explain your conclusions.

Answer 1

Answer:

The companies which possess significant voting rights in other companies ususally 20-50% shall be construed as associate companies

In this case:
--- Mr. John Anderson Holds 100% shares of Anderson Ltd & 30% of shares in BDO

Wilma Anderson (his wife) also holds 10% of BDO, making BDO as an associate company.

--- Mr. Basil Coper owns 35% shares

Holly copper(His wife & sister of John anderson) owns 25% shares in BDO. and also they both had 50% share in cooper inc, hence can be concluded as an associate company.
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