During the course of tax-driven reorganizations, it may be convenient or advantageous to issue corporate shares in exchange for a promissory note. It is particularly useful where a taxpayer desires to create paid-up capital (PUC) or cost basis (ACB) in shares without having to transfer cash. Although this practice is generally limited by corporate statutes, there are ways of making it work. This article examines the pit-falls and solutions to issuing shares for a promissory note. Reproduced with permission of the publisher LexisNexis Canada Inc. from
Canadian Current Tax, Vol. 24, No. 8, May 2014.
Please note that this publication presents an overview of notable legal trends and related updates. It is intended for informational purposes and not as a replacement for detailed legal advice. If you need guidance tailored to your specific circumstances, please contact one of the authors to explore how we can help you navigate your legal needs.
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