Issuing shares in private companies is generally subject to oversight by securities regulators. Understanding the rudiments of the regulatory environment is critical, if managements wants to protect itself from legal problems later on. Specifically, in most Canadian jurisdictions there are number of exemptions that companies can rely on to relieve themselves of some very onerous reporting requirements they would otherwise face.

In British Columbia the exemptions are as follows:

Exemptions you can use to fund your business

• Private issuer exemption
• Family, friends and business associates exemption
• Accredited investor exemption
• $150,000 exemption
• Employee, director, officer and consultant exemption
• Offering memorandum exemption

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Companies should take advice from public accountants who practice in the area of public company audit and assurance, or from securities lawyers. Often small, generalist firms won’t have the expertise to provide adequate advice in these matters.

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