Section 30 of the Small Business Venture Capital Act, authorizes the Investment Capital Branch to conduct random examinations of a venture capital corporation's (VCC) records. The majority of VCCs are audited at least once by the Investment Capital Branch's auditors during the time they are registered in the program.
VCCs that are found to be in contravention of the Act may have their registration in the program suspended or revoked. Failure to correct the action that caused the suspension or revocation may result in the government demanding repayment of tax credits issued.
Common issues identified as a result of previous random examinations include:
- Annual returns not filed in accordance with sections 29 of the Act
- Prohibited use of funds in accordance with sections 12 of the Act
Please review the Act and Regulation to ensure the VCC is not operating in a prohibited manner.