Under the 'direct' investment model, a small business registers as an eligible business corporation (EBC).  EBCs can accept equity capital directly from investors without having to set up a venture capital corporation (VCC).  This investment structure is ideal for an investor planning to be actively involved in the growth of the small business.

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A list of considerations to qualify:

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• being registered to do business in BC;

• having a permanent place of business in BC;

• having no more than 100 employees;

• paying at least 75% of annual wages and salaries to BC employees;

• being “substantially engaged” in one or more “qualifying activities”;

• having at least 80% of assets located within BC; and

• having at least $25,000 in equity capital.

 

$25,000 in Equity Capital Investment

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The company must have sold shares from its treasury for at least $25,000 in cash – and that transaction must be reflected in your central securities register. If your central securities register only shows nominally priced shares issued to the founders, for example, then you are not eligible to apply.

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If you don’t have that $25,000 in equity capital, you need to either: (1) sell shares for at least $25,000 before you apply as an EBC; or (2) convert into shares at least $25,000 in loans that have been made to the company.  This initial $25,000 is not eligible for tax credits.

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Ask us how to get qualified as an EBC or VCC

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Contact us for more information.

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