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Wired Explains Impediment to US - Canada Poolings of Interest

Martin O'Donnell pointed out an article on Wired News that identifies a really obvious disadvantage of starting a new business in Canada. According to the article, "The most contentious of the tax laws concerns cross-border
merger restrictions and capital gains. When an American
company purchases a Canadian firm in an all-stock deal,
Revenue Canada taxes the Canadians on the capital gains
even though they have not cashed out their shares."

For some reason, Revenue Canada has decided to single out mergers between Canadian and non-Canadian companies for this tax treatment.

This is evidenced by another quote from the Wired News article, "In comparison, the capital gains tax does not have to be paid
until the shares are converted to cash if the deal is between
two Canadian companies or two American ones."

Rick Nathan of Brightspark is quoted as saying that, "he plans to incorporate 10 startup companies in
Delaware that... {his company plans} to incubate over the next

That makes sense, eh?

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