Eligibility to register employee share ownership plan
3. (1) No corporation is eligible to register an employee share ownership plan under this Act unless, (a) the corporation is incorporated in Canada; (b) the aggregate of all wages and salaries paid in the last taxation year of the corporation that ends before the date of application under subsection 5 (1) to employees of permanent establishments of the corporation in Ontario for the purposes of the Corporations Tax Act is not less than 25 per cent of all wages and salaries paid in the year by the corporation; (c) either its gross revenue, together with the gross revenue of all associated corporations, or its total assets, together with the total assets of all associated corporations, in the last taxation year ending prior to the date of application under subsection 5 (1) does not exceed $50,000,000 or such other amount as is prescribed. Calculation of gross revenue and total assets (2) Subject to subsections (3) and (4), for the purposes of subsection (1) and section 10, (a) the gross revenue of a corporation in a taxation year is the amount equal to the product of, (i) the gross revenue of the corporation as disclosed in the financial statements of the corporation for that taxation year prepared in accordance with generally accepted accounting principles, and (ii) the ratio of 365 to the number of days in the taxation year; and (b) the total assets of a corporation in a taxation year is the amount equal to the sum of, (i) the total assets as disclosed in the financial statements of the corporation for that taxation year prepared in accordance with generally accepted accounting principles, and (ii) the amount by which the value of any asset of the corporation has been written down and deducted from its income or undivided profits where such amount is not deductible in the calculation of its taxable income for the current and all prior taxation years under Part I of the Income Tax Act (Canada). Idem, associated corporations (3) For the purposes of this section and section 10, (a) if a corporation is a member of a group of associated corporations during its last taxation year ending before the date of application under subsection 5 (1), the gross revenue of the corporation for the taxation year is the amount by which, (i) the sum of, (A) the gross revenue of the corporation determined under clause (2) (a), and (B) the aggregate of all amounts, each of which is the gross revenue of an associated corporation for its taxation year that ends in the last taxation year of the corporation determined under clause (2) (a), exceeds, (ii) the aggregate of any amounts included in the gross revenue of the corporation or an associated corporation attributable to transactions between the corporations; and (b) if a corporation is a member of a group of associated corporations during its last taxation year ending before the date of application under subsection 5 (1), the total assets of the corporation for the taxation year is the amount by which, (i) the sum of, (A) the total assets of the corporation determined under clause (2) (b), and (B) the aggregate of all amounts, each of which is the amount of the total assets of an associated corporation for its taxation year that ends in the last taxation year of the corporation determined under clause (2) (b), exceeds, (ii) the aggregate of, (A) the amounts, if any, included in the total assets of the corporation under subclause (i), representing debts owed at the end of the taxation year to the corporation by an associated corporation and to an associated corporation by the corporation, and (B) the cost to the corporation of any shares of an associated corporation beneficially owned by the corporation at the end of the taxation year and the cost to an associated corporation of any shares of the corporation beneficially owned by the associated corporation at the end of its taxation year. Idem, corporations in partnership (4) For the purposes of this section and section 10, a corporation that is a member of a partnership shall include in its gross revenue and in its total assets for a taxation year the percentage of gross revenue and the percentage of the total assets as disclosed in the financial statements of the partnership for the fiscal period ending in that taxation year prepared in accordance with generally accepted accounting principles that represents the corporation’s participation in the profits of the partnership during the fiscal period of the partnership. R.S.O. 1990, c. E.10, s. 3.