A director is connected with the company only if he, or an associate, or a partnership of which he or an associate is a member, receives, or is entitled to receive, any payment from the issuing company or a ‘related person’ during the period beginning two years prior to the share issue and ending (generally) three years after the issue (ITA 2007, s. 168(1)).

A ‘related person’ is:

(1)any company of which the individual, or an associate, is a director; and

(2)which is:

(a)a 51% subsidiary of the issuing company;

(b)a partner of the issuing company;

(c)a partner of a 51% subsidiary of the issuing company; or

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