A VCC is a newly incorporated British Columbia company registered under the Small Business Venture Capital Act.
B.C. investors receive a 30% tax credit for purchasing shares in a VCC.
The VCC uses capital, raised from its investors, to make equity investments in eligible small businesses.
To register as a VCC, an applicant must:
- incorporate under the Business Corporation Act (British Columbia)
- never have previously carried on business
- have authorized capital of only voting common shares (the shares must be without par value and have no special rights or restrictions except for special rights relating to share redemption). A VCC is entitled to have more than one class of common shares
NOTE: There is no guarantee an applicant will be registered under the Act.
The Act limits the dollar value of tax credits that may be issued in a calendar year. Click here for the current status of equity capital raised to date.
The Registrar of Companies will not incorporate a company with the initials "VCC" in its name without pre-approval from the Ministry. This approval can be obtained by completing the following steps:
- Reserve a company name containing the initials “VCC” with the Registrar of Companies
- File a completed VCC Name Consent Form with the Ministry
- The VCC’s business plan should be attached to the VCC Name Consent Form, and include information on how the VCC will raise and invest its funds (e.g. with or without an offering memorandum) together with background information about the people involved in the VCC (i.e. directors, officers, major shareholders and fund managers)
- After an initial review by Ministry staff, an approved VCC Name Consent Form will be returned to you. This form should be attached to the VCC’s Articles and Notice of Articles to be filed with the Registrar of Companies
- Request certified copies of the VCC’s Certificate of Incorporation, Articles, and Notice of Articles from the Registrar of Companies’ office (these documents are required attachments to the VCC Registration Application)
NOTE: The VCC’s Articles and Notice of Articles must contain certain standard clauses specified under the Act. These clauses are set out on the reverse of the VCC Name Consent Form.
After incorporation, the new company must raise at least $25,000 in cash (to a maximum of $50,000). After issuing shares to shareholders, the company may apply for registration by completing the Registration Application and all attachments.
Upon registration, all VCCs are automatically approved to raise $50,000 of equity capital. If the VCC wishes to raise more capital, it must file an Additional Equity Application (PDF 74 KB). Approvals to raise additional equity may be restricted by the Act’s limited tax credit budget.
A registration letter will be issued to the VCC confirming the date of registration. The letter will also specify the amount of equity capital the VCC is approved to raise for the current program year.
NOTE: The VCC cannot make an investment until it has been registered under the Act.
After registration, the VCC will deposit 30% of all funds raised into a special account called an Investment Protection Account. The VCC may apply for a release from the IPA when it makes eligible investments. Further details are included with the VCC’s registration letter.