Investment Protection Account

Under section 19 (1) of the Small Business Venture Capital Act, a venture capital corporation (VCC) is required to deposit 30% of all investments received into a special account called an investment protection account (IPA).

Funds may be released from this account only with the administrator’s prior written authorization. Approval for an IPA release is provided at the same time the VCC reports an eligible investment to the Venture Capital Tax Credit Program.

Establishing an IPA

The following documents must be completed by the VCC to establish an IPA at a financial institution of its choice, and present these documents, along with the "Instructions to Financial Institution for Setting up an IPA", to a financial institution.

The financial institution then opens an IPA and completes the “Financial Institution’s Confirmation”, which provides confirmation to the Venture Capital Tax Credit Program that the IPA has been established and confirms the amount on deposit.

Documentation confirming the establishment of the IPA must be sent to the Venture Capital Tax Credit Program within 30 days of the registration date of the VCC.

For further information, please consult the following documents:

Procedures for Establishing and Operating an IPA (PDF, 116 KB)

Instructions to Financial Institution for Setting up an IPA (PDF, 160 KB)

Resolution of VCC Board of Directors (authorizing the establishment of an IPA) (PDF, 65 KB)

Directions for Operation of an IPA (PDF, 138 KB)

Financial Institution's Confirmation (PDF, 100 KB)

Lawyer's IPA Confirmation (PDF, 99 KB)

IPA Release

To apply for the release of IPA funds, a VCC must have made or plans to make an eligible investment.

The VCC may apply for release of funds equal to the lesser of:

  • 37.5% of the purchase price of the eligible investment
  • the total amount in the IPA

Application for release of funds can be done by an IPA Release Application and Investment Report (PDF, 88 KB)