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What are the crowdfunding rules in Canada?

What are the crowdfunding rules in Canada?

What are the crowdfunding rules in Canada? 150 150 Jiang Hong Wilkin Business Law

Ontario (and QB, MN, NS, SK, NB) Multilateral Instrument 45-108 Crowdfunding became effective on January 25, 2016. The major requirements are the following:

1.    Head office of the issuer is located in Canada and a majority of directors of the issuer reside in Canada.

2.    The issuer provides the standard disclosure on website.

3.    Must use a registered funding portal.

4.    Investment limitation per investor:

  1. For a non-accredited investor, $2,500 per distribution, and $10,000 for all distributions in same calendar year.
  2. For an accredited investor, $25,000 per distribution, and $50,000 for all distributions in same calendar year.
  3. For a permitted client (mainly non-individual investors), no limitation.

5.    The issuer cannot raise fund more than $1,500,000 within 12 months.

6.    The issuer has responsibility to make certain disclosure after distribution.

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