Income Tax Act — I-3.3 248
ect of a qualifying business controlled by the trust; (c) the capital and income interests of each beneficiary described in clause (b)(i)(A) or (B) are determined in the same manner as the other beneficiaries described in those clauses, as applicable, based solely on any combination of the following criteria: (i) the total hours of employment service provided by the beneficiary to the qualifying business in respect of a particular time period, (ii) the total salary, wages and other remuneration paid or payable to the beneficiary by the qualifying business in respect of a particular time period, not exceeding, for any calendar year in the particular time period, twice the first dollar amount referred to in paragraph 117(2)(e), as adjusted by section 117.1, for the year (prorated based upon the number of days of the calendar year in the particular time period), and (iii) the total period of employment service the beneficiary has provided to the qualifying business since a particular time, (d) the trustees are prohibited from exercising their discretion to act in the interest of one beneficiary (or group of beneficiaries) to the prejudice of another beneficiary (or group of beneficiaries), (e) each trustee of the trust is either a corporation resident in Canada that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee or an individual (other than a trust), (f) each trustee has an equal vote in the conduct of the affairs of the trust, (g) at least one-third of the trustees must be beneficiaries described in clause (b)(i)(A), (h) if any trustee is appointed (other than by an election within the last five years by the beneficiaries described in clause (b)(i)(A)), at least 60% of all trustees must be persons that deal at arm’s length with each person who has, directly or indirectly in any manner whatever, as part of a transaction or event or series of transactions or events, sold shares of a qualifying business to the trust (or to any person or partnership affiliated with the trust) prior to or in connection with the trust acquiring control of the qualifying business, (i) more than 50% of the beneficiaries of the trust described in clause (b)(i)(A) must approve each of the following transactions or events prior to their occurrence: (i) any transaction or event or series of transactions or events that causes at least 25% of the beneficiaries to lose their status as beneficiaries under clause (b)(i)(A) (unless the change in status is in respect of a termination of employment for cause), and (ii) a winding-up, amalgamation or merger of a qualifying business (other than in the course of a transaction or event or a series of transactions or events that involves only persons or partnerships that are affiliated with the qualifying business), and (j) all or substantially all the fair market value of the property of the trust is derived, directly or indirectly, from shares of the capital stock or indebtedness of one or more qualifying businesses that the trust controls and that carry on an active business; ( fiducie collective des employés ) employee trust means an arrangement (other than an employee ownership trust, an employees profit sharing plan, a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”) established after 1979 (a) under which payments are made by one or more employers to a trustee in trust solely to provide to employees or former employees of (i) the employer, or (ii) a person with whom the employer does not deal at arm’s length, benefits the right to which vests at the time of each such payment and the amount of which does not depend on the individual’s position, performance or compensation as an employee, (b) under which the trustee has, since the commencement of the arrangement, each year allocated to individuals who are beneficiaries thereunder, in such manner as is reasonab