Solution 55

(A) Associated by par. 256(1)(c)

each corporation was controlled by one person through ownership of common shares
Jennifer, who controls KCL, is related to Rodney, who controls YCL
Rodney is Jennifers grandson-in-law and is, therefore, related by marriage [pars. 252(1)
(e), 252(2)(d)]
Jennifer owns 30% of the common shares of YCL, which are not shares of a specified class,
through her ownership of shares in KCL by virtue of par. 256(1.2)(d)

(B) Not associated under ssec. 256(1); par. 256(1)(e) does not apply
Par. 256(1)(e) requires that each corporation be controlled by a related group
Tricia and Kristen are cousins and, hence, are not related under the Act
Stephanie is Kristens aunt and Monica is Tricias aunt; hence, Stephanie is not related to
Kristen and Monica is not related to Tricia under the Act
Ssec. 256(2.1) would apply if it can be established that one of the main reasons for the
separate existence of the two corporations is a reduction of taxes
the two corporations are managed separately, so that there appears to be a good business
reason for their separate existence
Ssec. 256(5.1) does not apply to deem the parents to have control of DML through direct or
indirect influence, since they have no role in the management of DML and have no expertise in
that business

(C)
CJRL and TIL are associated by par. 256(1)(b)
Kamen controls both corporations through share ownership
TIL and KML are associated by par. 256(1)(a)
TIL controls KML
alternatively, they are associated by par. 256(1)(b)
Kamen controls both because he controls TIL through direct ownership and he controls
KML through her control of TIL
CJRL and KML are associated by par. 256(1)(b)
Kamen controls both, because he controls CJRL through direct share ownership and he
controls KML through the control of TIL
SWL is not associated with any of the other corporations
Par. 256(1)(c) does not apply because Kamen and Geoff are not related
Kamen is Geoffs wifes uncle and, hence, not related under the Act
Ssec. 256(2.1) should not apply because CJRL and SWL operate independently and,
hence, there is good business reason for separate existence

Ssec. 256(5.1) should not apply because Kamen is providing start-up financing to SWL through
the CJRL share ownership and, hence, is not exerting influence on SWL.