Any Canadian company which, together with its affiliates, has less than $500 million in total assets and pays at least 25% of its wages to employees resident in B.C. is eligible to register a Plan under the Employee Share Ownership Program.
Employees wishing to invest under an ESOP plan on a tax-credit-eligible basis must be:
- BC residents
- work an average of 20 or more hours per week for the company
- not already be major shareholders of the company. Plans may require employees to work for the company for a qualifying period not to exceed two years. In some cases, employees who do not meet the above criteria may purchase shares under the Plan, but will not receive a BC tax credit
Form of Investment
The shares that employees may purchase under the Plan must be ‘equity shares’ out of the company’s treasury. Equity shares are fully participating, voting shares which are not limited as to risk. The common shares of most companies will meet these requirements. Share certificates representing the ESOP shares must be sent to an authorized depository to be held in escrow for three years.