Registration

The requirements for registration as an EBC include the following:

Corporation

The EBC must be a corporation incorporated under B.C.'s Business Corporations Act, or Canada's Business Corporations Act, or be incorporated in another province and registered to carry on business in B.C.

Qualifying Business Activities

The EBC must be substantially engaged in one of the eight qualifying activities from the time of registration to 5 years after the date of the last investment for which an investor received a tax credit. The eight qualifying activities are set out in section 11 of the Small Business Venture Capital Regulation (the (SBVC Regulation”) and are described in ESB & EBC Policy Statement (gov.bc.ca). The qualifying activities are:

1. Manufacturing and processing of goods produced in British Columbia;

2. Destination tourism resort, tourist attraction or a tourist service;

3. Research and development of proprietary technology;

4. Development of interactive digital new media product;

5. Community diversification by an EBC located outside the Metro Vancouver Regional District and the            Capital Regional District*;

6. Manufacturing and processing and/or research and development of clean technologies;

7. Advanced commercialization carried on by an EBC located outside the Metro Vancouver Regional              District and the Capital Regional District; and

8. Scale-up activities carried on by an EBC that has been substantially engaged in one of the seven                qualifying activities for the previous 2 years, and at least 2 years has elapsed since the EBC first raised      tax credit supported equity capital.

* to qualify for Community Diversification an EBC must be substantially engaged in one of the seven qualifying activities listed above; or, per section 11(2)(e) and (f) of the SBVC Regulation, be substantially engaged in non-traditional agriculture, which is defined as a product that does not have a proven record in BC, and has difficulty attracting investment or debt financing; or retail and commercial services that are not present in the community and promote community diversification.

Annual Employment

The EBC, together with any affiliates, cannot have more than 100 employees at the time of an initial investment by an investor under the program.

If the EBC's employment grows beyond 100 employees the EBC may raise additional equity capital from the same VCC or EBC investors.

Wages and Salaries

The EBC must pay at least 75% of its wages and salaries to employees who regularly report to work at operations located in B.C. 

The 75% threshold drops to 50% for EBCs primarily engaged in the export of goods or services outside B.C. 

B.C. Presence

The EBC must maintain a permanent establishment in B.C.

Permanent establishment means a place of business staffed by senior management who direct the EBC's operations, and can bind it contractually.

Assets

The EBC must maintain at least 80% of its assets in B.C.

Minimum Equity Capital

The EBC must have equity capital of at least $25,000 (not including convertible rights) prior to registration (equity capital raised prior to registration is not eligible to receive tax credits).

Prohibited Uses of Capital

The funds invested in an EBC under the program must be used to finance its start-up, expansion or growth. An EBC must not use, directly or indirectly, any funds raised under the program for prohibited purposes, defined under section 11 (2) of the Small Business Venture Capital Act Regulation. See also other prohibited uses of funds defined under section 28.93 of the Act.

The EBC must maintain these eligibility requirements while it is registered in the program. Registration requirements end five years following the date of the EBC's most recent issue of shares for which tax credits were issued.

Failure to maintain these requirements may result in the EBC's registration in the program being suspended or revoked. Failure to correct the action that caused the suspension or revocation may result in the government demanding repayment of tax credits previously issued.

The maximum equity capital that an EBC can raise under the Venture Capital Program is $10 million.

Upon registration the EBC will receive an equity authorization specifying the amount of equity it can raise, between specified dates, under the program for the current tax budget year.

Tax credit budgets are limited and equity authorization amounts may be limited or equity authorizations may be not be issued in the event that budgets sell out.

The EBC's equity authorization ends on its expiry date indicated in the authorization letter. In the event the EBC fails to comply with the requirements of the Act, the equity authorization may be cancelled with limited or no notice.

EBCs should claim tax credits through the electronic Tax Credit Application (eTCA) system as soon as investment has been raised, and share purchase reports and tax credit application requirements have been met.

EBCs are encouraged to apply to raise additional equity capital each tax budget year online via the electronic Tax Credit Application (eTCA) system. Alternately, an EBC may submit a completed Additional Equity Application (PDF, 203 KB) form to their Portfolio Manager or to the Venture Capital Tax Credit Program at InvestmentCapital@gov.bc.ca.

When raising equity capital, the EBC must ensure that each individual investor completes and signs a Share Purchase Report (PDF, 639 KB).

Applicants are encouraged to apply for registration as an EBC by submitting an application online via the electronic Tax Credit Application (eTCA) system. Alternately, an applicant may electronically submit PDF copies of the following required registration documents to the Venture Capital Tax Credit Program at InvestmentCapital@gov.bc.ca.

 

• A completed EBC Registration Application (PDF, 680 KB)
• Business plan or executive summary of the business plan
• Central securities register showing $25,000 in equity capital