Qualified small business corporation share
Qualified small business corporation share
A share that:
- at the time of sale, was a share of the capital stock of a small business corporation and was owned by the trust or by a partnership related to the trust;
- throughout the 24-month period preceding the sale, was owned only by the trust or by a person or partnership related to the trust;
- throughout the same period, was a share of the capital stock of a Canadian-controlled private corporation (CCPC) of which more than 50% of the fair market value (FMV) of the assets was composed of:
- assets used principally in an eligible business actively carried on primarily in Canada by the CCPC or by a corporation related to the CCPC,
- certain shares or debts of related corporations, or
- a combination of the previous two categories.
Section 726.6.1
Note
A small business corporation is a CCPC in which all or substantially all of the FMV of its assets consists of:
- assets used mainly in an active eligible business carried on primarily in Canada by the CCPC or by a related corporation;
- certain shares or certain debts of small business corporations; or
- a combination of the two above-mentioned types of assets.
To be related to a trust, a person or partnership must be:
- a beneficiary of the trust;
- a partnership of which the trust is a member; or
- the person from whom the trust purchased the shares, and who was related to all the beneficiaries of the trust at the time it disposed of the shares.