What are the crowdfunding rules in Canada?https://jhwbizlaw.com/wp-content/themes/movedo/images/empty/thumbnail.jpg150150Jiang Hong Wilkin Business LawJiang Hong Wilkin Business Law//jhwbizlaw.com/wp-content/uploads/2020/07/jhw-logo.png
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:
For a non-accredited investor, $2,500 per distribution, and $10,000 for all distributions in same calendar year.
For an accredited investor, $25,000 per distribution, and $50,000 for all distributions in same calendar year.
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.