Document ID: chunk:federal_register_of_legislation:C2010C00615:clause:5_4:p6
Version: federal_register_of_legislation:C2010C00615
Segment Type: clause
Provision Reference: sch 5 cl 4 (pt 6/8)
Character Range: 318159–320873

per share would be reasonable.

Note: If no new shares are issued by Robert Co, the cost base of the original shares that Margaret Co holds would not be adjusted.

 (4) The amount allocated to a new interest under subsection (3) must not be more than its market value just after the arrangement was completed.

124‑783  Meaning of significant stakeholder, common stakeholder, significant stake and common stake

Significant stakeholder

 (1) An original interest holder is a significant stakeholder for an *arrangement if it had:
 (a) a *significant stake in the original entity just before the arrangement started; and
 (b) a significant stake in the replacement entity just after the arrangement was completed.

 (2) Also, if an original interest holder is an acquiring entity, any other original interest holder is a significant stakeholder for an *arrangement if it:
 (a) had a *significant stake in the original entity just before the *arrangement started; and
 (b) is an *associate of the replacement entity just after the arrangement was completed.

Certain companies and trusts not required to trace interests

Common stakeholder

 (3) An original interest holder is a common stakeholder for an *arrangement if it had:
 (a) a *common stake in the original entity just before the arrangement started; and
 (b) a common stake in the replacement entity just after the arrangement was completed.

 (4) If an acquiring entity for an *arrangement is an original interest holder, each other original interest holder that has a replacement interest is a common stakeholder for the arrangement.

 (5) No original interest holder is a common stakeholder for an *arrangement if either the original entity or the replacement entity had at least 300 *members (for a company) or 300 beneficiaries (for a trust) just before the arrangement started.

Significant stake

 (6) An entity has a significant stake in a company at a time if the entity, or the entity and the entity's *associates between them:
 (a) have at that time *shares carrying 30% or more of the voting rights in the company; or
 (b) have at that time the right to receive for their own benefit 30% or more of any *dividends that the company may pay; or
 (c) have at that time the right to receive for their own benefit 30% or more of any distribution of capital of the company.

Note: The tests are applied to interests held directly by an entity and its associates.

Example: There are 4 shareholders in YZT Company: Sonja has 60%, Mario has 20%, Peter has 10% and Dave has 10%.

 Sonja, Mario and Peter are associates. They each have a significant stake in YZT because, on an associate inclusive basis, they each have a 90% stake in YZT. Dave does