Registration confirms that the small business qualifies as an eligible business corporation (EBC) under section 28.2, and as an eligible investment pursuant to section 10 of the Small Business Venture Capital Act. It also confirms that the description of the business operations meet the prescribed activity requirements under section 11 of the Small Business Venture Capital Regulation.
EBCs can apply to register using the Registration Application (PDF, 680 KB).
The requirements for registration as an EBC include the following:
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.
The EBC must be substantially engaged in B.C. in one or more of the seven qualifying activities:
- Manufacturing or processing, including services directly associated with the export of value-added goods produced in B.C.
- Destination tourism
- Research and development of proprietary technology
- Development of interactive digital new media product
- Community diversification, outside of the Metro Vancouver Regional District and the Capital Region District
- Clean technology
- Advanced commercialization, outside of the Metro Vancouver Regional District and the Capital Regional District
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.
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.
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 under the program for the current tax budget year.
Equity authorizations are not a guarantee that investors will receive tax credits. Tax credit budgets are limited and tax credits are available on a first come, first served basis.
The EBC's equity authorization ends on its expiry date, or the day the EBC's assigned tax credit budget sells out, whichever is sooner. Equity authorizations may be suspended at any time with limited or no notice.
EBCs should claim tax credits through the electronic Tax Credit Application (eTCA) as soon as investment has been raised, and share purchase reports and tax credit application requirements have been met.
EBCs can apply to raise additional equity capital each tax budget year using the Additional Equity Application (PDF, 83 KB).
When raising equity capital, the EBC must ensure that each individual investor completes and signs a Share Purchase Report (PDF, 639 KB)
If you have contacted the Investment Capital Branch and spoken with a Portfolio Manager regarding applying to register an EBC with the Venture Capital Tax Credit Program you can PDF the required registration application documents and email them to the Portfolio Manager. Alternately, you can email the documents to the branch at InvestmentCapital@gov.bc.ca.
The following registration application documents are required:
- A completed EBC Registration Application (PDF, 680 KB)
- Business plan or executive summary of business plan
- Central securities register showing $25,000 in equity capital