Specified small business corporation shares have the following characteristics:
- These are new ordinary shares issued by the company to you, the investor.
- The corporation is a qualifying small business corporation at the time the shares were issued.
- The total book value of the assets of the company and related companies does not exceed 50 000 000 $ immediately before and after the issue of shares. The ” value total account for the assets of a society “ is the amount at which a company’s assets at any given time would be valued for the purposes of its balance sheet at that time if that balance sheet were prepared in accordance with generally accepted accounting principles in use in Canada at that time. However, the book value of the assets of a company which is a share or a debt issued by a related company is deemed to be nil.
- As long as you own the shares, the company that issued them is a qualifying corporation active in business.
To be able to defer the capital gain, you must have owned the listed small business corporation shares for more than 185 days from from the date you acquired them.
Replacement shares must be acquired at any time during the year of the disposition or within 120 days of the following year.
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