If you're a start-up, raising money can feel like a full
Alberta recently brought in a few rule changes which may be of
interest: ASC Rule 45-517 Prospectus Exemption for Start-up
Businesses (Start-up Business Exemption
– PDF) (effective July 19, 2016) is designed to
"facilitate capital-raising for small- and medium-sized
enterprises on terms tailored to deliver appropriate safeguards for
investors." Second, Alberta is considering the adoption of Multilateral Instrument 45-108
Crowdfunding (MI 45-108) and opened
it for a comment period in July.
Crowdfunding (MI 45-108)
If the crowdfunding rules are adopted for Alberta issuers, it
would facilitate the distribution of securities through an online
funding portal in Alberta as well as across any of the other
jurisdictions which have adopted it. Alberta would join
Saskatchewan, Manitoba, Ontario, Quebéc, New Brunswick and
Nova Scotia who have already adopted MI 45-108.
Start-up Business Exemption (Rule 45-517)
As for the new Start-up Business Exemption, here are the
essentials as pitched by the ASC:
Designed for Alberta start-ups
seeking to raise funds from Alberta investors
Aimed at "very modest financing
needs", see the caps below
Designed to be a simpler and less
Can be used by issuers wishing to
raise funds through their friends and family, or to crowdfund
through an online funding portal provided the portal is a
registered dealer, and funds are raised only from Alberta
The issuer can issue common shares,
non-convertible preference shares, securities convertible into
common shares or non-convertible preference shares, among other
Issuer must prepare an offering
There is a cap of $250,000 per
distribution and a maximum of two start-up business distributions
in a calendar year
Aggregate lifetime cap $1
Designed for a maximum investment
amount of $1,500 per investor. However, through a registered
dealer, the maximum subscription from that investor can be as high
The offering must close within 90
There is a mandatory 48 hour period
for investors to cancel their investment
The issuer must provide each investor
with a specified risk disclosure form and risk acknowledgment
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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