Administrator Approval Transactions
The program administrator is authorized under the Small Business Venture Capital Act to review both the form and substance of a transaction to determine compliance with the Act.
If the substance of a transaction is contrary to the Act, the transaction will not be permitted even if the technical requirements of the Act have been met.
Generally, it is considered to be contrary to the Act for program users to "structure around" the objectives of the program to attempt to do indirectly what cannot be done directly.
If program users have concerns about a proposed transaction, you are urged to consult a professional adviser (e.g. lawyer or accountant) to satisfy yourself that the substance and form of the transaction are not contrary to the Act.
Examples where administrator approval is required are:
Under section 28.5 (2) of the Act, if the EBC is in financial difficulty, the administrator may permit eligible investors to temporarily control the EBC, under circumstances and on terms that the administrator may determine.
Under section 34 of the Act, the administrator may extend, with or without conditions, the time limit for doing anything under the Act or the Regulation and may grant the extension even if the time limit to be extended has expired.