ACB amount paid for something originally

1
? ACB amount paid for something originally ?
e.g. X pays 100 for shares of Xco ? ACB 100
2
? ownership interests in a corporation are
represented by shares ? PUC amount
originally paid to a Corporation for shares
issued from treasury ? example X pays 100
for 100 shares of Xco ? PUC 100 ? in this
example, PUC and ACB are the same
3
X sells its 100 shares of Xco to Y for
1000 ? in Ys hands the shares have an ACB of
1000 ? PUC remains 100 ? Y didnt buy
shares from the Corporation, he bought the
shares from X therefore PUC remains at 100
4
X buys 100 shares from treasury for 1000 ? ACB
1000 PUC1000 ? X sells his 100 shares to Y
for 500 ? in Ys hands ACB500 PUC1000
5
? on an original issuance of shares from
corporate treasury, PUCACB ? thereafter for a
number of reasons the two may diverge ? example
sale of shares to a third party PUC stays the
same ACB will change ? ACB what I pay for
something ? PUC what is paid to a Corporation
on original issuance of shares
6
X purchases land for 1000 ? ACB 1000 ? PUC
N/A ? PUC is only applicable to shares
7
? why is PUC important? ? PUC can be taken out
of a Corporation without paying tax ? general
rule is that distributions from corporations are
taxed as dividends ? if you take money out of a
corporation, you will pay tax ? PUC is the
exception
8
? go to original example ? X has 100 to pay
for shares ? he gives it to the Corporation for
shares ? presumption is that if I have 100 to
pay for shares of a Corporation, Ive paid tax
on that money ? therefore, since I have already
paid tax on the 100, I should be able to remove
that money from the Corporation without paying
further tax
9
? if I put 100 into the Corporation to buy
shares, I can later take out that 100 without
paying tax ? because PUC can be taken out
without paying tax there is a number of rules in
place to prevent artificial manipulations of
PUC ? PUC is a very important tax concept ?
some of the rules we will see later in sections
86 and 51 are there solely to prevent PUC from
artificially increasing
10
DISPOSITIONS ? X buys 100 shares of Xco from
treasury for 100 ? PUC 100 ? ACB 100 ?
X sells the shares to Y for 1000 ? Proceeds -
ACB capital gain ? X has a gain equal to
1000 - 100 or 900 ? this is a capital gain
and subject to tax
11
? ACB will determine how much gain I have when I
dispose of something because the gain is equal
to proceeds minus ACB ? PUC will determine how
much money I can take out of a company without
paying tax
12
? PUC and ACB are very important in practice as
illustrated by the following common
situation ?X buys 100 shares of Xco from
treasury paying 100 ? ACB 100 ? PUC
100 ? business is successful, makes money ?
creditor proofing
13
? X is the sole shareholder of Xco ? X will
transfer shares to a holding company (Yco)
X X
Yco
Yco
Xco
Xco
14
? advantage is that the dividend from Xco to Yco
is not subject to tax (intercorporate dividend
rule) ? therefore get money out of Xco (away
from creditors) into Yco without paying tax
15
Example (continued) X pays 100 to Xco for 100
shares ? PUC 100 ? ACB 100 ? FMV is
1000 X transfers shares to Yco in exchange for
shares of Yco. What happens? ? proceeds of
1000 less ACB of 100 Capital Gain of 900
16
? X is paying tax on a 900 gain ? but...X
didnt get any cash. Ultimately he still owns
Xco, there hasnt been a transfer to a third
party. ? He hasnt cashed out, is it fair for
him to be paying tax? ? CRA says no
17
? therefore there is a concept called a
rollover ? generally a rollover occurs
where ? despite there being a disposition ?
despite receiving fair market proceeds ?
disposition can be treated as having occurred for
proceeds ACB ?very significant because it
means no gain and no tax recognized
18

• X pays 100 to Xco for 100 shares from treasury
• ? ACB 100, PUC 100
• ? FMV 1000
• ? X transfers the shares to Yco for shares of Yco
• ? shares of Yco will be worth 1000 because it
  will own Xco
• ? rollover provisions will say that despite
  receiving proceeds of 1000, X will be treated as
  having disposed of shares for 100 (i.e. ACB)
• ? therefore Proceeds (100) - ACB (100) 0
  gain

19
The flipside of a rollover is ?Yco has paid
1000 to X for the shares of Xco (because Yco
shares issued in payment are worth 1000). ?
normally ACB of Ycos Xco shares would be
1000 ? rollover provisions will say that the
transferee will inherit transferors ACB ?
therefore Xcos shares have ACB of only 100 to
Yco ? in addition, the ACB of the shares X takes
back will only be 100
20
? after the rollover, the situation is as
follows X ACB
of Yco shares 100
100 shares ACB 100
PUC 100
FMV 1000 ? the Xco
shares have the same tax attributes in Ycos
hands as they had in Xs hands ? stepping into
the shoes of transferor ? deferral, not
avoidance of tax
Yco
Xco
21
Summary ? ACB ? PUC ? Gain proceeds -
ACB ? rollover deem sale to occur at ACB
therefore no gain ? flipside is that the
transferee steps into shoes of transferor, so has
same tax attributes as transferee
22
? Section 85 applies to transfers of most types
of property ? sections 86 and 51 apply only to
transfers of shares ? these are done in an
estate freeze scenario
23
Consider the following example ? X Co. operates
a construction business. ? It has an aggregate
of 100 issued and outstanding common shares,
which are owned equally by Mr. and Mrs. X. Each
of the Xs paid 50 for their shares when X Co.
was incorporated. ? The FMV of the 100 common
shares is now 2,500,000 in total. ? Mr. and
Mrs. X are each 60 years old, and they have 3
children, ages 25, 28 and 31. The children have
been working for X Co. for a number of years and
the Xs want to give them an ownership interest
in the family business. ? Mr. and Mrs. X would
give their shares to the kids, but a gift of the
shares would result in a deemed disposition at
FMV (paragraph 69(1)(b) of the ITA), and would
give rise to a capital gain of 2,499,900.
24

• ? The Xs would be subject to tax on such a gain
  even though they hadnt actually received any
  cash from the children.
• ? The Xs would sell their shares to the children
  to get around this problem, but the children have
  no savings and cant obtain bank financing, so
  they are not able to purchase their parents
  shares.
• ? Accordingly, the Xs decide to undertake an
  estate freeze transaction.
• ? To implement the estate freeze Mr. and Mrs. X
  would exchange their common shares of X Co. for
  voting preferred shares of X Co. which have a
  fixed redemption value of 2,500,000.

25

• ? Following the exchange, each of the children
  would subscribe for 100 common shares of X Co.
  for a nominal amount, which they are able to do
  because the value of X Co. is frozen in the
  preferred shares issued to Mr. and Mrs. X.
• ? All future growth in the value of X Co. will
  accrue to the common shares

26
?ROLLOVER CONCEPT ? Normally disposition
capital gain proceeds ACB ?Section 85
of the ITA allows a taxpayer to elect that
proceeds a particular amount ?if elected
amount equals ACB of the transferred property, no
tax will be triggered as a result of the
transfer. Example ?land with ACB of 10,000,
FMV of 50,000 transferred to a
corporation. ? elected amount is 10,000 no
capital gain ? preconditions to using section 85
of the Act (restriction on type of property that
can be transferred, elected amount
considerations, requirement to file a joint
election, rigid rules regarding the allocation of
the elected amount to the consideration received
from the transferee corporation, etc.)
27
SECTION 86 PRECONDITIONS TO APPLICATION ? a
reorganization of the capital of the
corporation ? the shares that the taxpayer
exchanged must have been capital property of the
taxpayer ? the shares that the taxpayer
exchanged must have comprised all of the shares
of that particular class of shares owned by the
taxpayer ? the consideration received by the
taxpayer in respect of the exchange must include
other shares of the corporation ? subsection
85(1) of the Act cannot apply to the exchange.
28
Application STEP 1 Determine Cost of New
Shares The cost of each class of new shares
received by the taxpayer on the exchange is
deemed to be the amount determined by the
following formula ACB old shares FMV
non-share consideration x FMV of particular
class of new shares FMV of all
new shares STEP 2 Determine Deemed
Proceeds of Disposition Taxpayer deemed to have
disposed of old shares for proceeds of
disposition equal to the aggregate of the cost
of new shares received in the exchange the
cost of all other property received by taxpayer
29
Example 1 Mrs. X owns all the common shares of X
Co. The shares have an ACB of 100, paid up
capital (PUC) of 100 and a FMV of 2,500,000.
Mrs. X exchanges her common shares for preferred
shares of X Co. having a fixed redemption amount
of 2,500,000. Step A Cost of New Shares
100 nil x 2,500,000 100
2,500,000 Step B Proceeds of Disposition
100 nil 100 Result is that Mrs. X will not
incur a gain by exchanging her common shares of
X Co. for preferred shares (i.e. Proceeds of
Disposition ACB 100 - 100 0). NOTE
Only a deferral of tax, not an exemption from
tax. On ultimate disposition Mrs. X will incur a
capital gain of 2,499,900 (i.e. 2,500,000 -
100).
30
Example 2 Same as 1, only Mrs. X receives
1,250,000 Class A preferred shares (fixed
redemption amount of 1,250,000) and 1,250,000
Class B preferred shares (fixed redemption
amount of 1,250,000) on the exchange. Step A -
Cost of New Shares Class A preferred
shares 100 nil x 1,250,000 50 2,50
0,000 Class B preferred shares 100
nil x 1,250,000 50 2,500,000 Step B -
Determine Deemed Proceeds of Disposition
Cost of all new shares cost non share
consideration 50 50 nil 100
31
Example 3 Same as 1, only Mrs. X receives 50
common shares (FMV of 1,250,000) and 1,250,000
preferred shares (fixed redemption amount of
1,250,000) on the exchange. Step A Determine
Cost of New Shares Common shares 100
nil x 1,250,000 50 2,500,000 Preferred
shares 100 nil x 1,250,000 50 2,50
0,000 Step B - Determine Deemed Proceeds of
Disposition Cost of all new shares cost
non-share consideration 50 50 nil
100
32
?ACB of the exchanged common shares is split
equally between the 50 common shares and
1,250,000 preferred shares received by Mrs. X. ?
This can be contrasted with the result that would
be obtained under subsection 85(1) of the Act,
pursuant to which the cost of the exchanged
property is allocated first to non-share
consideration, secondly to preference shares and
lastly to common shares. ? If section 85(1) were
applicable in this case, the cost of the
preferred shares received by Mrs. X would be
100, while the cost of the common shares she
received would be 0.
33
Example 4 Same as 1, only assume that the ACB of
Mrs. Xs common shares is 10,000 and that she
receives a promissory note in the amount of
10,000 and 2,490,000 preferred shares (fixed
redemption amount of 2,490,000) on the
exchange. Step A - Determine the Cost of the
Promissory Note The change in this scenario is
that in addition to preferred shares, Mrs. X has
received non-share consideration (i.e. boot)
having a value of 10,000. Section 86 cost to
a taxpayer of any boot received for the exchanged
shares will be the FMV of that boot. In this
case the cost of the promissory note to Mrs. X
would be 10,000.
34
Example 4 (continued) Step B Determine Cost of
New Shares 10,000 10,000 x 2,490,000 nil
2,490,000 Step C - Determine Deemed
Proceeds of Disposition nil 10,000
10,000 What if promissory note was for
100,000? ?Cost of promissory note
100,000 ? Cost of preferred shares nil.
? The deemed proceeds 100,000
35
Example 4 (continued) ? Mrs. X would have
incurred a gain in the amount of 90,000 (which
gain will be treated as a deemed dividend
pursuant to subsection 84(3) of the Act). ? The
point is that, as with section 85 of the Act, the
deemed proceeds of sale will never be less than
the fair market value of any boot taken back, so
boot should be limited to the ACB of the
exchanged shares. ? Note Section 86 of the Act
applies automatically to the exchanges it
captures. The only mechanism for opting out of
section 86 is to elect to have section 85 apply
to the transaction.
36
SECTION 86 PUC ADJUSTMENT ? Tax Act does not
define PUC. ? corporate law (subsection 26(2) of
The Corporations Act) corporation must add the
full amount of the consideration it receives
for issuing shares to the stated capital account
it maintains in respect of those shares. ? in
the examples (i.e. Mrs. X exchanges common shares
having a value of 2,500,000 for preferred shares
having a value of 2,500,000), stated capital for
corporate law purposes (which is the starting
point for determining PUC for tax purposes) would
be 2,500,000. ? Subsection 86(2.1) of the Act
provides for an adjustment to the PUC. ? If it
were not for this adjustment, corporate law would
establish the PUC of the new shares to be equal
to the FMV of the consideration received by the
corporation for issuing the shares.
37
Subsection 86(2.1) of the Act provides that where
an exchange of shares is subject to section 86,
the PUC of a class of shares received on the
exchange as otherwise determined under the
corporate law shall be reduced by the amount
determined under the following formula (A
B) x C A Where A the
increase, determined without reference to
section 86 of the Act, in the PUC of all of the
shares issued on the transfer B the PUC of
the exchanged shares less the FMV of any
non-share consideration C the increase,
determined without reference to section 86 of
the Act, in the PUC of the particular class of
shares.
38
The result is that the PUC of the new shares will
be adjusted to the amount by which the PUC of the
exchanged shares exceeds the FMV of any boot
received on the exchange.
39
Example Mrs. Xs common shares have ACB of 100
and PUC of 100, FMV of 2,500,000. Mrs. X
exchanges her common shares for preferred shares
of X Co. having a fixed redemption amount of
2,500,000. If no section 86(2.1), PUC of the
preferred shares would be 2,500,000 (i.e. the
FMV of the consideration for which the preferred
shares were issued). PUC could be received
without paying tax.
40
Example (continued) Result is that an amount
that would have been taxed as a dividend will not
be taxed at all. Subsection 86(2.1) is an
anti-avoidance provision to prevent this from
happening. In the example, subsection 86(2.1)
would reduce the PUC of the preferred shares from
2,500,000 to 100 as follows PUC
Reduction (2,500,000 100) x 2,500,000
2,500,000 2,499,900 Therefore PUC
2,500,000 - 2,499,900 100.
41
Note In Manitoba subsection 26(3) of The
Corporations Act allows a corporation to add to
the stated capital account maintained for a class
of shares an amount that is less than the FMV of
the consideration for which the shares were
issued. Subsection 26(3) is usually taken
advantage of so that stated capital is consistent
with PUC. In such circumstances, there would be
no adjustment to the PUC under subsection 86(2.1)
of the Act.
42

• SECTION 86 BENEFIT PROVISION
• ? As with section 85 of the Act, FMV of the
  consideration received by the taxpayer on the
  exchange must FMV of the shares that the
  taxpayer is exchanging.
• ? If the FMV of the consideration received by the
  taxpayer exceeds the FMV of the exchanged shares,
  subsection 15(1) of the Act will apply to include
  the excess in the taxpayers income.
• ? If the FMV of the consideration received by
  the taxpayer is less than the FMV of the
  exchanged shares subsection 86(2) of the Act
  could apply.

43
Subsection 86(2) provides that if the FMV of the
exchanged shares exceeds the total of (i) the
cost to the taxpayer of any boot received on the
exchange (cost of boot FMV) and (ii) the
FMV of the shares received by taxpayer on the
exchange, And it is reasonable to consider
the excess as a benefit that the taxpayer desired
to confer on a related person
44
86(2) Benefit Provision (continued) Rule
1 The taxpayer is deemed to dispose of the
exchanged shares for the lesser of (i) the
total of the FMV of any boot received from the
corporation as normally determined in accordance
with section 86 and the amount of the benefit
conferred and (ii) the FMV of the exchanged
shares. Rule 2 The taxpayers capital loss from
the disposition of the exchanged shares shall be
deemed to be nil. Rule 3 The taxpayers cost of
any new shares received on the exchange will be
equal to the ACB of the exchanged shares, less
the total of (i) the FMV of any boot received and
(ii) the benefit conferred.
45
The effect of subsection 86(2) may be to force a
taxpayer to recognize a capital gain on the
disposition of the exchanged shares and alter the
ACB of the new shares he or she receives as a
result of the reorganization.
46
86(2) Benefit Example 1 ? Mr. X and Mrs. X are
equal shareholders of X Co. ? Mr. Xs common
shares have a FMV of 1,250,000 and an ACB of
100,000. ? Mr. X transfers the common shares
to X Co., taking back preferred shares having a
fixed redemption value of 1,000,000. Point By
taking back consideration that has a FMV that is
less than the FMV of the exchanged shares, Mr. X
has conferred a benefit on Mrs. X. (i.e. the
total value of X Co. is 2,500,000. Mr. X holds
preferred shares worth 1,000,000. Mrs. Xs
common shares are now worth 1,500,000, not
1,250,000. Mrs. X is related to Mr. X) 86(2).

47

• Mr. X is deemed to have disposed of his shares
  for the lesser of
• the FMV of any boot received as normally
  determined under subsection 86 (i.e. 0) plus the
  benefit conferred on Mrs. X (i.e. 250,000) and
• the FMV of the exchanged shares (i.e.
  1,250,000).
• In this case the deemed proceeds of disposition
  will be 250,000, resulting in a capital gain to
  Mr. X of 150,000 (i.e. 250,000 - 100,000).

48
? The cost to Mr. X of his new preferred shares
of X Co. will be deemed to be equal to the
ACB of the exchanged shares (100,000) Less the
total of the FMV of boot received (0) plus the
benefit (250,000). ?In this case the cost of
Mr. Xs preferred shares will be nil. ? When
Mr. X disposes of his preferred shares, his
capital gain will be computed with reference to
an ACB of 0. ? Recall that the general rule
under section 86 is that the cost of the new
shares is equal to the ACB of the old shares less
the FMV of any boot received.
49
The result is that of the 250,000 benefit,
150,000 will be recognized by Mr. X immediately,
and the remaining 100,000 will be applied to
reduce the ACB of Mr. Xs preferred shares. This
will increase the gain incurred on any future
disposition of those shares (i.e. instead of
1,000,000 - 100,000, gain will be 1,000,000 -
0).
50
86(2) Example 2 ? Mr. X and Mrs. X are equal
shareholders of X Co. ? Mr. Xs common shares
have a FMV of 1,250,000 and an ACB of
1,000,000. ? Mr. X transfers the common shares
to X Co., taking back cash of 250,000 and
preferred shares having a fixed redemption
amount of 500,000. The benefit conferred on
Mrs. X is 500,000.
51

• Mr. X is deemed to have disposed of his shares
  for the lesser of
• the FMV of any boot received as normally
  determined under subsection 86 (i.e. 250,000)
  plus the benefit conferred on Mrs. X (i.e.
  500,000) and
• (ii) the FMV of the exchanged shares (i.e.
  1,250,000).
• In this case the deemed proceeds of disposition
  will be 750,000.
• The result is a capital loss to Mr. X of
  250,000 (i.e. 750,000 - 1,000,000). The
  capital loss is deemed to be nil under subsection
  86(2).

52
?The cost to Mr. X of his new preferred shares of
X Co. will be deemed to be equal to the ACB of
the exchanged shares (1,000,000) Less the
total of the FMV of boot received (250,000) plus
the benefit (500,000). ? In this case the cost
of Mr. Xs preferred shares will be 250,000. ?
When Mr. X disposes of his preferred shares, his
capital gain will be computed with reference to
an ACB of 250,000.
53
The result is that, of the 500,000 benefit ?
no portion is recognized immediately. ?a
250,000 capital loss is denied. ?the remaining
250,000 has reduced the ACB of the preferred
shares. This will increase future capital gain
by 250,000
54

• Section 86
• Determine cost of new shares
• Cost proceeds of disposition
• Should be a rollover
• PUC
• Benefit Section

55
SECTION 51 PRECONDITIONS TO APPLICATION ?the
shares that the taxpayer exchanged must have been
capital property of the taxpayer ?the only
consideration received by the taxpayer in respect
of the exchange can be other shares of the
corporation ?subsection 85(1) or section 86
cannot apply to the exchange ?practically, we 51
because forgot to do 86.
56
APPLICATION Step 1 No Disposition An exchange
of shares of a corporation for other shares of
the corporation is deemed not to be a
disposition. Step 2 Determine Cost of New
Shares The cost of each class of new shares
received by the taxpayer on the exchange is
deemed to be the amount determined by the
following formula ACB old shares x FMV of
particular class of new shares
FMV of all new shares
57
Example Mrs. X owns all of the issued and
outstanding common shares of X Co. Mrs. Xs
common shares of X Co. have an ACB of 100, PUC
of 100 and a FMV of 2,500,000. Mrs. X
exchanges her common shares for preferred shares
of X Co. having a fixed redemption amount of
2,500,000. Step 1 The exchange of the common
shares for the preferred shares is deemed not to
be a disposition. Step 2 Cost of New
Shares The cost to Mrs. X of each class of new
shares received by her as a result of the
exchange is determine as follows
100 x 2,500,000 100
2,500,000
58
NOTE As with section 86, section 51 only
provides for a deferral of tax, not an exemption
from tax. When Mrs. X ultimately disposes of her
preferred shares of X Co. she will incur a
capital gain of 2,499,900 (i.e. 2,500,000 -
100). NOTE Section 51 also provides that a
taxpayer can convert a bond, debenture or note
issued by a corporation into shares of the
corporation on a tax deferred basis.
59
?like section 86, section 51 has a PUC adjustment
clause. ? Subsection 51(3) provides that the PUC
of a class of shares received on the exchange as
otherwise determined under the corporate law
shall be reduced by the amount determined under
the following formula (A B) x C
A Where A the increase, determined
without reference to section 51 of the Act, in
the PUC of all of the shares issued on the
transfer B the PUC of the exchanged
shares C the increase, determined without
reference to section 51 of the Act, in the PUC
of the particular class of shares.
60
In this case, subsection 51(3) would reduce the
PUC of the preferred shares from 2,500,000 to
100 as follows PUC Reduction (2,500,000
100) x 2,500,000 2,500,000
2,499,900 Therefore PUC 2,500,000 -
2,499,900 100. PUC of new shares will always
be limited to PUC of old shares.
61
SECTION 51 BENEFIT PROVISION ?If the FMV of
the consideration received by a taxpayer on an
exchange of shares exceeds the FMV of the
exchanged shares, subsection 15(1) of the Act
will apply to include the excess in the
taxpayers income. ? If the FMV of the
consideration received by the taxpayer is less
than the FMV of the exchanged shares subsection
51(2) of the Act could apply. ? Similar to
subsection 86(2), 51(2) provides that if the FMV
of the exchanged shares exceeds the FMV of the
shares received by the taxpayer on the exchange,
and it is reasonable to consider the excess as a
benefit the taxpayer desired to confer on a
related person then the following rules apply
62
Rule 1 The taxpayer will be deemed to have
disposed of the exchanged shares for the lesser
of (i) the total of the ACB of the exchanged
shares and the amount of the benefit conferred
and (ii) the FMV of the exchanged shares.
Rule 2 The taxpayers cost of any new shares
will be equal to the lesser of (i) the ACB of
the exchanged shares and (ii) the FMV of the
shares received by the taxpayer on the exchange
63
51(3) Benefit Example 1 ? Mr. X and Mrs. X are
equal shareholders of X Co. ? Mr. Xs common
shares have a FMV of 1,250,000 and an ACB of
100,000. ? Mr. X transfers the common shares
to X Co., taking back preferred shares having a
fixed redemption value of 1,000,000. ?
Benefit 250,000 (took back shares worth
250,000 less than what I started with.
Therefore Mrs. Xs shares worth more.
64
Mr. X is deemed to have disposed of his shares
for the lesser of (i) The total of the ACB of
the exchanged shares (i.e. 100,000) plus the
benefit conferred on Mrs. X (i.e. 250,000)
and (ii) the FMV of the exchanged shares (i.e.
1,250,000). ? In this case the deemed proceeds
of disposition will be 350,000, resulting in a
capital gain to Mr. X of 250,000 (i.e. 350,000
- 100,000). ? The cost to Mr. X of his new
preferred shares will be the lesser of the ACB of
the exchanged shares (100,000) and the FMV of
the preferred shares (1,000,000). ? In
contrast to section 86(2), the entire 250,000
benefit will have to be recognized by Mr. X at
the time of the exchange.
65
(No Transcript)
66

• Section 86 and 51
• Have rules for determining proceeds
• Determine ACB of new shares
• Adjust PUC
• Contain a benefit provision
• Allow for rollovers

67
INADVERTENT DISPOSITIONS ?Interpretation
Bulletin IT-448 ? Are alterations made in the
rights attaching to shares significant enough to
amount to a disposition of the shares. ? CRA
gives the following examples (a) a change in
voting rights attached to shares that effects a
change in the voting control of the
corporation (b) a change in a defined
entitlement (e.g., a change in par value) to
share in the assets of a corporation upon
dissolution (preferred shares only) (c) the
giving up or the addition of a priority right to
share in the distribution of assets of the
corporation upon dissolution (d) the addition or
deletion of a right attaching to a class of
shares that provides for participation in
dividend entitlements beyond a fixed
preferential rate or amount (e) a change from a
cumulative to a non-cumulative right to
dividends or vice versa.