A “short-form amalgamation” is an amalgamation between certain affiliated corporations that requires only the approval of the directors. Short-form amalgamations can be either vertical or horizontal. Where the corporations to be merged have a parent-subsidiary relationship, the process is referred to as a vertical amalgamation. Where the subject corporations are each owned by the same parent their merger is a horizontal amalgamation.

There are three requirements that must be met for a short-form amalgamation:

  1. Share Cancellations: On a vertical amalgamation, the shares of each of the amalgamating subsidiary corporations must be cancelled without any repayment of capital. On a horizontal amalgamation, the shares of all but one of the amalgamating subsidiary corporations must be cancelled without any repayment of capital.
  2. By-laws/Notice of Articles and Articles: The by-laws and articles of the amalgamated corporation must be the same as the by-laws and articles of the amalgamating holding corporation on a vertical amalgamation and the same as the by-laws and articles of the amalgamating subsidiary corporation whose shares are not cancelled on a horizontal amalgamation.
  3. Share Issuances: On a vertical amalgamation, no shares can be issued or assets distributed by the amalgamated corporation. On a horizontal amalgamation, the stated capital of the shares of the subsidiary corporations whose shares are cancelled must be added to the stated capital of the amalgamated subsidiary corporation whose shares are not cancelled.