Produce the complete chain: share registers for the Canadian operating company, the holding company and the U.S. entity, plus the purchase agreement and any shareholder agreements that allocate control. The reviewer needs to see the same people or entities controlling both ends.
Draw the chart from the registers, then explain each link
A qualifying relationship exists when one entity owns and controls the other, or when both are owned and controlled by the same parent or the same individual or group in the same proportions. When an acquisition runs through a holding company, the question is who owns the holding company. Hypothetical example: an East Hants freight business is owned sixty percent by one family and forty percent by another, and the U.S. cross-dock was bought by a holding company owned entirely by the majority family. The two operating companies are then affiliates only if the same group controls both — which may or may not be true depending on the shareholder agreement. Assemble the registers, the incorporation documents in both countries, bank records showing the purchase funds, and the agreement itself. Add a one-page chart that cites the document supporting each arrow. Do not rely on the accountant's tax structure diagram, which serves a different purpose.
Hypothetical example: an East Hants funeral-supply distributor acquires a U.S. warehouse through a holding company with three owners. The first review traces each owner's percentage before and after closing and compares it with voting rights in the shareholder agreement. Registers, certificates, closing documents, and corporate resolutions settle control; a colourful ownership chart only summarizes them. If a side agreement gives a minority owner practical veto power, disclose it, because the relationship analysis follows actual control rather than a simplified percentage.