Advanced Share Transactions: Section 86 Rollover

Section 86 Rollover

Tip: create a Section 86 Rollover precedent transaction so you can save and reuse these steps in the future.

To reflect a section 86 rollover navigate to the Events view for the entity and follow these steps:

  1. Click the + button in the top right of the page above the events table.

Summary 

  1. Authorize a new class of Special Shares 
  2. Freeze the value of your capital assets by exchanging shares of an existing class to the new Special Shares class 
  3. Authorize a new class of Common Shares 
  4. Issue common shares at nominal value to the relevant shareholders

Details

To authorize a new class of Special Shares follow these steps:

  1. Click the Actions button in the toolbar to open the Actions panel.
  2. Scroll the Actions panel to the first section, Actions.
  3. Find or search for the Authorize Capital (All) action.
  4. Click on this action to add it to the event canvas.
  5. Select the date for the transaction.
  6. Next to the action heading "Authorize Capital" click the select menu and make sure New is selected. This will ensure the action creates a new class rather than amending an existing class.
  7. Ensure Type is set to Equity.
  8. Enter the Authorization Date for the class.
  9. Enter Special for the classification.
  10. In the Ledger Note input area, type S. 86 Rollover.
  11. In the Properties section add the following properties: Redeemable, Redemption Price, Retractable, Retraction Price. Enter your desired redemption and retraction prices for the share class, if required.
  12. Complete any other details as desired.
  13. Freeze the value of your capital assets by exchanging shares of an existing class to the new Special Shares class
  14. Click the Actions button in the toolbar to open the Actions panel.
  15. Scroll the Actions panel to the third section, Automations.
  16. Select the automation Share Exchange (Capital Shareholders).
  17. The Share Exchange automation will appear in the event canvas.
  18. Enter the details into the Share Exchange automation including the class to cancel and class to issue from. You enter a ratio if the exchange is not 1:1, which is the default. For a rollover you will typically exchange an existing Common shares class to the new Special shares class.
  19. Click the Go button to perform the automation. This will create all the required transactions for you automatically.
  20. Authorize a new class of Common Shares
  21. Follow step 1 above again but modify the details to create a new Common share class with the desired share properties.
  22. Issue common shares at nominal value to the relevant shareholders
  23. Click the Actions button in the toolbar to open the Actions panel.
  24. Scroll the Actions panel to the first section, Actions.
  25. Find or search for the Issue Shares (All) action.
  26. Click the action to add it to the canvas.
  27. Next to the action group header Issue Shares make sure to select the share class you want to issue. In this case, select the Common share class that has just been authorized.
  28. Enter the relevant details of the issuance.
  29. You can duplicate this issuance by clicking the duplicate button in the group header to make subsequent issuances to other persons.

How do I reflect a Section 85 Rollover?

Tip: create a Section 85 Rollover precedent transaction so you can save and reuse these steps in the future.

To reflect a section 85 rollover navigate to the Events view for the entity and follow these steps:

  1. Click the + button in the top right of the page above the events table.

Summary

  1. Authorize a new class of shares, if necessary
  2. Issue shares relevant to the exchange
  3. Add the asset or liability (promissory note) relevant to the exchange

Details

To authorize a new class of Special Shares follow these steps:

  1. Click the Actions button in the toolbar to open the Actions panel.
  2. Scroll the Actions panel to the first section, Actions.
  3. Find or search for the Authorize Capital (All) action.
  4. Click on this action to add it to the event canvas.
  5. Select the date for the transaction.
  6. Next to the action heading "Authorize Capital" click the select menu and make sure New is selected. This will ensure the action creates a new class rather than amending an existing class.
  7. Ensure Type is set to Equity.
  8. Enter the Authorization Date for the class.
  9. Enter the desired classification.
  10. In the Ledger Note input area, type S. 85 Rollover.
  11. In the Properties section add the following properties: Redeemable, Redemption Price, Retractable, Retraction Price. Enter your desired redemption and retraction prices for the share class, if required.
  12. Complete any other details as desired.
  13. Issue shares relevant to the exchange
  14. Click the Actions button in the toolbar to open the Actions panel.
  15. Scroll the Actions panel to the first section, Actions.
  16. Find or search for the Issue Shares (All) action.
  17. Click the action to add it to the canvas.
  18. Next to the action group header Issue Shares make sure to select the share class you want to issue.
  19. Enter the relevant details of the issuance.
  20. In the Ledger Note input area, type S. 85 Rollover.
  21. You can duplicate this issuance by clicking the duplicate button in the group header to make subsequent issuances to other persons.
  22. Add the asset or liability (promissory note) relevant to the exchange
  23. Click the Actions button in the toolbar to open the Actions panel.
  24. Scroll the Actions panel to the first section, Actions.
  25. Find or search for the Assets & Liability (All) action.
  26. Click the action to add it to the canvas.
  27. Enter the details for the asset relevant to the rollover.