Tax on inbound investment—Canada—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to tax on inbound investment in Canada published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2022). Authors: Gowling WLG—Paul Carenza; David P. Stevens; Ash Gupta 1. What are the differences in tax treatment between an acquisition of stock in a company and the acquisition of business assets and liabilities? Purchasers generally prefer to purchase assets and sellers generally prefer to sell shares. The main features of a stock purchase for a foreign purchaser using a Canadian acquisition vehicle (Canadian Holdco) are: • The cost of the shares will not be deductible in the calculation of income since it will be an expenditure on account of capital, not income. Instead, the purchased shares will have a tax cost equal to the price paid for the shares. On a subsequent sale of the shares the purchaser can deduct the tax cost of the shares from the proceeds in the calculation of the purchaser's gain, 50 per cent of which is included in income. • It is possible for the Canadian Holdco to wind up the target and to 'bump' the tax cost of the target's non-depreciable capital property by an amount equal to the lesser of the fair market value of the property and the tax cost of the shares. Bump
Corporate governance—Malta—Q&A guide This Practice Note contains a jurisdiction-specific Q&A guide to corporate governance in Malta published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2022). Authors: GVZH Advocates—Luca Vella; Catherine Janula; Nico Fauser 1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis? Good corporate governance practices apply to all entities, with the main source of corporate governance being the Companies Act (Chapter 386 of the Laws of Malta), which regulates the division of authority between the board of directors and general meetings of shareholders. The memorandum and articles of association also act as an important source of corporate governance practices, since this document regulates the internal management and administration practices of companies. Public listed entities are subject to the Code of Principles of Good Corporate Governance set out in the Capital Market Rules issued by the Malta Financial Services Authority (the Code). The Capital Market Rules list 12 principles of good corporate governance that public listed companies should endeavour to adopt. If a company chooses not to comply with one or more of the provisions of the Code, it must give a careful and clear explanation with respect to the reason for
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Property due diligence report—share or asset purchase A. Executive summary 1 Scope of review For the purposes of this report we have reviewed the following properties [insert details of the properties], (the ‘Properties’). 2 Basis of the review 2.1 Information relating to the Properties for the purposes of conducting our due diligence exercise and preparing our report has been sourced from the following: 2.1.1 documents provided in the due diligence [data room OR files] as set out in the index in Schedule [insert number]; 2.1.2 responses to the due diligence questionnaire and further enquiries as set out in Schedule [insert number]; 2.1.3 results of searches of the following public registries: (a) [ [HM Land Registry;] (b) [the Land Charges Registry;] (c) [Register of Local Land Charges;] (d) [Registers of Common Land; and] (e) [add any additional searches made].] 2.2 We have conducted no other searches, enquiries or investigations into the [Target Business OR Target Group]. 3 Summary of Investigations and material issues The tables below summarise the matters relating to the Properties which we consider to be major issues in the Proposed Transaction. Where possible we have endeavoured to provide an
Remeasurement 1 [Gross Internal Area means the gross internal area of the Premises expressed in square [feet OR metres] and measured in accordance with the Royal Institution of Chartered Surveyors’ Property Measurement (2nd Edition). OR Net Internal Area means the net internal area of the Premises expressed in square [feet OR metres] and measured in accordance with the Royal Institution of Chartered Surveyors’ Property Measurement (2nd Edition).] 2 When the [frame OR shell OR [other relevant point of construction]] of each of the relevant parts of the Works i
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Can the National Security and Investment Act 2021 apply to corporate joint venture transactions? Scope of regime As part of a general trend towards the stricter control of foreign direct investment, the National Security and Investment Act 2021 (NSIA 2021) came fully into force on 4 January 2022. It establishes a new standalone statutory regime that allows the government to review and intervene in a wide range of investments in businesses (including joint ventures) that are active in the UK or acquisitions of related assets, with the ultimate objective of protecting national security. The ability to ‘call-in’ a transactions under NSIA 2021 applies, retrospectively, to any transaction completed on or after 12 November 2020. The new regime falls into two parts: • a mandatory notification regime, which applies from 4 January 2022, such that anyone acquiring control of entities that are active in 17 specific sectors in the UK, will have to be notified to the government and must be cleared before completion. The notification obligation applies regardless of whether: (i) the investor is foreign or UK-based, (ii) the entity is established inside or outside of the UK, if the entity carries on activities in the UK or supplies goods or services to persons in the UK and (iii) regardless of deal value. If a deal requiring mandatory notification is not approved, the transaction will be legally void and
Under the US Sanctions regime, if any entity is owned in the aggregate, directly or indirectly, 50% or more by one or more blocked persons, it is itself considered to be a blocked person. What are the equivalent rules regarding minority ownership and/or control which apply under the UK/EU regime? The EU and, by extension, current UK regimes, require that an entity be ‘directly or indirectly controlled by or owned more than 50%’ by a designated sanctions target. In the UK, that means a person appearing on the consolidated lists here. This wording derives from article 5 of Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, which requires that ‘all funds, other financial assets and economic resources belonging to, or owned or held by, a natural or legal person, group or entity included in the list […] shall be frozen’. The EU Best Practice Guide provides further guidance on this terminology. It states: ‘Holding or controlling should be construed as comprising all situations where, without having a title of ownership, a designated person or entity is able lawfully to dispose of or transfer funds or economic resources he, she or it does not own, without any need for prior approval by the legal owner.’ At Part VIII ‘Ownership and control’, it further states: ‘The
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This week's edition of Environment weekly highlights includes: an analysis of the UK Critical Minerals Strategy by Professor Robert Lee of Birmingham Law School, as well as a consideration of the IPBES’ methodological assessment of the diverse values and valuation of nature. In addition, this week the Department for Business, Energy & Industrial Strategy has announced a £37m investment into innovative biomass technologies, the Department for Environment, Food & Rural Affairs has announced a £44.2m fund for woodlands expansion, the UK government has published its strategic framework for a net zero energy system and Defra and the Forestry Commission have launched a consultation on deer population management.
This week's edition of the Local Government weekly highlights includes case analysis of Thurrock Council v Stokes, which considers the practical and procedural difficulties encountered in the context of mass traveller injunctions; Hull CC v KF, in which the court found that capacity to engage in sexual relations can be person specific in some cases; R (Rotala) v Greater Manchester Combined Authority on a judicial review involving a bus franchising scheme; Buckinghamshire Council v SST, in which the latest judicial review involving HS2 was dismissed; R (Bell) v Lambeth LBC, which involved the judicial review of a council’s housing decision; Abdikadir v Ealing LBC, which involved the local authority officers mistakenly derogating from the local authority’s policies; and Worthing BC v Secretary of State. It also includes analysis of the UK coronavirus (COVID-19) inquiry, the Ockenden Review and the Levelling-Up and Regeneration Bill. The weekly highlights also includes further updates on governance, public procurement, education, children’s social care, social care, healthcare, social housing, licensing, local government finance and planning.
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