Bankruptcy and Insolvency Act — B-3 4
Definitions 4 (1) In this section, entity means a person other than an individual; ( entité ) related group means a group of persons each member of which is related to every other member of the group; ( groupe lié ) unrelated group means a group of persons that is not a related group. ( groupe non lié ) Definition of related persons (2) For the purposes of this Act, persons are related to each other and are related persons if they are (a) individuals connected by blood relationship, marriage, common-law partnership or adoption; (b) an entity and (i) a person who controls the entity, if it is controlled by one person, (ii) a person who is a member of a related group that controls the entity, or (iii) any person connected in the manner set out in paragraph (a) to a person described in subparagraph (i) or (ii); or (c) two entities (i) both controlled by the same person or group of persons, (ii) each of which is controlled by one person and the person who controls one of the entities is related to the person who controls the other entity, (iii) one of which is controlled by one person and that person is related to any member of a related group that controls the other entity, (iv) one of which is controlled by one person and that person is related to each member of an unrelated group that controls the other entity, (v) one of which is controlled by a related group a member of which is related to each member of an unrelated group that controls the other entity, or (vi) one of which is controlled by an unrelated group each member of which is related to at least one member of an unrelated group that controls the other entity. Relationships (3) For the purposes of this section, (a) if two entities are related to the same entity within the meaning of subsection (2), they are deemed to be related to each other; (b) if a related group is in a position to control an entity, it is deemed to be a related group that controls the entity whether or not it is part of a larger group by whom the entity is in fact controlled; (c) a person who has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to, or to acquire, ownership interests, however designated, in an entity, or to control the voting rights in an entity, is, except when the contract provides that the right is not exercisable until the death of an individual designated in the contract, deemed to have the same position in relation to the control of the entity as if the person owned the ownership interests; (d) if a person has ownership interests in two or more entities, the person is, as holder of any ownership interest in one of the entities, deemed to be related to himself or herself as holder of any ownership interest in each of the other entities; (e) persons are connected by blood relationship if one is the child or other descendant of the other or one is the brother or sister of the other; (f) persons are connected by marriage if one is married to the other or to a person who is connected by blood relationship or adoption to the other; (f.1) persons are connected by common-law partnership if one is in a common-law partnership with the other or with a person who is connected by blood relationship or adoption to the other; and (g) persons are connected by adoption if one has been adopted, either legally or in fact, as the child of the other or as the child of a person who is connected by blood relationship, otherwise than as a brother or sister, to the other. Question of fact (4) It is a question of fact whether persons not related to one another were at a particular time dealing with each other at arm’s length. Presumptions (5) Persons who are related to each other are deemed not to deal with each other at arm’s length while so related. For the purpose of paragraph 95(1)(b) or 96(1)(b), the persons are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length. R.S., 1985, c.