Small Business Venture Capital Act

Small Business Venture Capital Act 429 1996 1527898742/96429/tlc96429_f E3tlc96429 Definitions and interpretation 1 1 In this Act: administrator means the person to be known as the administrator of venture capital corporations and designated by the minister to perform the duties of the administrator under this Act; affiliate , if used to indicate a relationship between corporations, means any corporation where one is the subsidiary of the other, or both are subsidiaries of the same corporation, or a each of them is controlled by the same person or the same group of persons, or b one of them is controlled by one person and the other is controlled by an associate, as defined in paragraphs (e) or (f) of the definition of "associate", of that person; annuitant , in relation to a a trust governed by a registered retirement savings plan as defined in the Income Tax Act (Canada), means an annuitant as defined in section 146 (1) of that Act, and b a trust governed by a registered retirement income fund as defined in the Income Tax Act (Canada), means an annuitant as defined in section 146.3 (1) of that Act; associate , if used to indicate a relationship with a person, means a a corporation of which the person owns, directly or indirectly, shares carrying 10% or more of the outstanding voting rights for the election of the directors of the corporation, b a partner of the person, c a participant in a joint venture with the person, d a trust or estate i in which the person has, in the opinion of the administrator, a substantial beneficial interest, or ii for which the person serves as trustee or in a similar capacity, e a spouse, parent, grandparent, child, grandchild, brother or sister of the person, or f a parent, grandparent, child, grandchild, brother or sister of the spouse of the person, residing in the same residence; authorized share structure has the same meaning as in the Business Corporations Act ; convertible right means a right entitling its holder to receive a share referred to in paragraph (a) of the definition of "equity share" without the holder paying any further amount to receive the share; debt obligation includes a mortgage, bond, debenture, note, loan or similar obligation, whether secured or unsecured; eligible business corporation means a small business registered under Part 2; eligible investment means an investment permitted by section 10 or prescribed by regulation; employee includes a person engaged by a small business for a prescribed period calculated in the prescribed manner; equity capital means, subject to section 12 (2), the consideration in money received by a company before or after its registration under this Act as a venture capital corporation for its issued shares or by a small business for its issued equity shares; equity share means a a share of a class of shares whether or not the share carries voting rights, but does not include a share having prescribed rights and restrictions, b any warrants, options or rights entitling their holders to purchase or acquire the shares referred to in paragraph (a), b.1 a convertible right, or c other prescribed securities; major shareholder , in relation to a corporation, means a person whose shares or convertible rights in the corporation, together with the shares or convertible rights, if any, owned by the person's associates and affiliates, a carry in the aggregate 10% or more of the voting rights, under any circumstances, attached to shares or convertible rights in the corporation, or b carry in the aggregate less than 10% of the voting rights, under any circumstances, attached to shares or convertible rights in the corporation if the person is a member of a common interest group whose members own or hold shares or convertible rights which allow the group to control the corporation; ownership includes beneficial ownership; shareholder includes the holder of a convertible right; small business means a corporation that has no more than 100 employees calculated in the prescribed manner; spouse means a person who a is married to another person, or b is living with another person in a marriage-like relationship, and has lived in that relationship for a continuous period of 6 months; subsidiary means a corporation which, in respect of another corporation, is controlled, either directly or indirectly, by that other corporation; TFSA has the same meaning as in the Income Tax Act (Canada); TFSA holder has the same meaning as "holder" in section 146.2 (1) of the Income Tax Act (Canada); venture capital corporation means a corporation registered under section 3; widely held venture capital corporation means a venture capital corporation that has no major shareholder. 2 In a determination under this Act of whether a corporation is controlled by one or more persons, account must be taken of the relevant facts, including the existence of any option, warrant or right described in subsection (7) (b). 3 Without limiting subsection (2), a corporation is controlled by a person or a common interest group if a shares of the corporation carrying more than 50% of the outstanding voting rights for the election of the directors are held by or for the benefit of that person or common interest group, and b the votes carried by the shares referred to in paragraph (a) are sufficient, if exercised, to elect a majority of the directors of the corporation. 4 A corporation is the holding company of another corporation if that other corporation is its subsidiary. 5 For the purposes of this Act, shares are deemed to be held for the benefit of an individual if they are beneficially owned by a corporation controlled by the individual or by an affiliate of that corporation. 6 For the purposes of this Act, a corporation is deemed to own shares and convertible rights that are owned by its affiliates. 6.1 The annuitant of a trust governed by a a registered retirement savings plan, or b registered retirement income fund as defined in the Income Tax Act (Canada) is deemed to have purchased, held or disposed of shares or convertible rights that are purchased, held or disposed of by the trust. 6.2 The TFSA holder of a TFSA is deemed to have purchased, held or disposed of shares or convertible rights that are purchased, held or disposed of by the TFSA. 7 For the purposes of this Act other than the definition of "affiliate" in subsection (1), in calculating the total number of shares of a corporation that are owned or controlled, a if a share carries the right to more than one vote, each vote carried by the share is deemed to be a share, and b there must be included in the total number of shares any share that would be issued or transferred following the exercise of i an option, warrant or right, and ii a conversion right that is attached to a debt obligation or to a share of the corporation. 8 For the purposes of this Act, 2 or more persons holding the same shares or convertible rights or holding shares or convertible rights jointly are required to be counted as one shareholder. 9 For the purposes of the holding of an investment referred to in sections 12 to 14, a small business does not cease to be a small business if, while the investment is held, the number of employees of the small business and its affiliates is more than 75. 10 A reference in this Act to a series of transactions or events includes any related transactions or events completed in contemplation of the series. 11 Any calculation or determination under this Act may be based on projections that the administrator considers to be reasonable. 12 For the purposes of this Act, if the holder of a convertible right exercises the holder's right to receive a share referred to in paragraph (a) of the definition of "equity share" in subsection (1), a the exercise of the right i is deemed not to be a disposition of the convertible right, and ii is deemed not to result in a redemption, acquisition or cancellation of the convertible right, b the share i is deemed to have been issued on the date that the convertible right was issued, and ii is deemed to have remained outstanding from the date that the convertible right was issued to the holder until the date that the holder disposes of the right or the convertible right is redeemed or cancelled, and c any tax credit or tax credit certificate issued under this Act for the convertible right is deemed to have been issued for the share. 1 Venture Capital Corporation Tax Credits Application for registration 2 1 To apply for registration under this Part, a company must deliver to the administrator a proposal setting out all of the following: a the name of the company and its incorporation date and number; b the location of its head office, registered office and records office; c the authorized equity capital; d the number of issued shares and the amount received for them; e the kind and amount of any outstanding debt obligation of the company; f the number, names and resident addresses of its directors, officers and beneficial shareholders and the number of shares held by each; g other information that is prescribed. 2 A proposal must be signed by one director and one officer and be accompanied by a certified copy of the company's articles and memorandum or notice of articles. 3 The administrator may request an applicant to supply information or documents in addition to those required under subsections (1) and (2). Registration 3 1 The administrator may, in the administrator's discretion, register under this Part a company if the administrator is satisfied that the company meets all the following qualifications: a is a company incorporated under the Company Act or the Business Corporations Act ; b has a name that includes "(VCC)" before the word or abbreviation required by section 23 (1) of the Business Corporations Act ; c has never previously carried on business; d has or will have equity capital of at least $25 000; e has an authorized share structure consisting of only either or both of the following: i common shares without par value having no special rights or restrictions, ii common shares without par value having special rights relating only to the redemption of the shares by the company; f has a memorandum or articles that restricts the business of the company to assisting development of small businesses by i making investments permitted by this Part, and ii providing business and managerial expertise to small businesses in which it has made or proposes to make an eligible investment; g meets other prescribed conditions. 1.1 For the purposes of subsection (1) (d), the definition of "equity capital" in section 1 is to be read as if the reference to "equity shares" were a reference to "shares". 2 [Repealed 1998-42-48.] 3 If the administrator accepts an application for registration under this Part, the administrator must issue a certificate to that effect, and the applicant is deemed to be registered on the date of registration contained in the certificate. 4 [Repealed 2010-21-193.] The register 4 1 The administrator must maintain a register of venture capital corporations. 2 The register must be open for public inspection during normal business hours at a place to be determined by the administrator. 3 The register must contain the following information in respect of each venture capital corporation: a the name of the venture capital corporation; b the date it was registered; c the location of its registered office; d any other prescribed information. Permanent establishment 5 1 In this section, permanent establishment has the same meaning as in the Income Tax Act . 2 A venture capital corporation must establish a permanent establishment in Canada within 30 days after being registered and must afterward maintain a permanent establishment in Canada. 3 A venture capital corporation a may establish and maintain only one permanent establishment in Canada, and b must not establish or maintain a permanent establishment outside of Canada. Restrictions on business and authorized capital 6 1 A venture capital corporation must not carry on any type of activity other than a making investments permitted under section 18, and b providing business and managerial expertise to small businesses in which it has made or proposes to make an eligible investment. 2 No act of a venture capital corporation, including the transfer of property by or to it, is invalid merely because the act contravenes subsection (1). 3 The equity capital of a venture capital corporation, including the equity capital referred to in section 9, may be limited to prescribed maximum amounts. 4 [Repealed 2003-8-6.] Restrictions on purchase of shares and share certificates 7 1 All issued shares of a venture capital corporation must be fully paid for in cash. 2 All share certificates of a venture capital corporation must conspicuously state the following on their face: "The value of these shares may be significantly affected by the repayment provisions of section 22 of the Small Business Venture Capital Act ." 3 Without the written approval of the administrator, a venture capital corporation must not alter any of the following: a its memorandum or notice of articles; b its authorized share structure; c a provision of its articles respecting a matter referred to in section 3 (1) (e). 4 A venture capital corporation must not issue a convertible right. Minimum capital requirements 8 1 By the end of its first year after the date of registration and afterwards, a venture capital corporation must have at least $50 000 of equity capital. 1.1 For the purposes of subsection (1), the definition of "equity capital" in section 1 is to be read as if the reference to "equity shares" were a reference to "shares". 2 A venture capital corporation must a have a prescribed amount invested in eligible investments within the prescribed time limits, and b keep that amount in eligible investments for at least the prescribed period. 3 A regulation prescribed for the purposes of subsection (2) may prescribe differently for different circumstances. Equity capital issues 9 A venture capital corporation must apply to the administrator to raise equity capital and the administrator may approve the raising of equity capital subject to any condition that the administrator may determine, including but not limited to a a condition that the shares may only be issued, as the administrator specifies, to i investing entities, or ii persons, as defined in section 20 (1), b setting the maximum consideration for which these shares may be issued to those investing entities or persons, and c a condition that the equity capital be issued only for the purposes of investment in a small business referred to in section 10 (1) (c) that is engaged in i a prescribed business activity, or ii a business activity described in the regulations that is specified by the administrator in the condition. Investment in small business 10 1 A venture capital corporation may make an investment in a small business if the following criteria are met: a subject to subsection (1.1), the small business, together with its affiliates, has no more than 100 employees calculated in the prescribed manner; b unless otherwise provided by regulation, at least 75% of the wages and salaries, determined in the prescribed manner, of the small business are or will be paid to employees who regularly report to work at operations located in British Columbia; c the small business, if required by a condition of the administrator, is or will be substantially engaged, determined in the prescribed manner, in British Columbia in i a prescribed business activity, or ii a business activity described in the regulations that is specified by the administrator in the condition; d the investment consists or will consist of i the direct acquisition from the small business of equity shares issued for the purpose of raising new equity capital, ii the acquisition by the venture capital corporation of equity shares issued by the small business in prescribed circumstances under a prospectus, offering memorandum or other disclosure document, iii the acquisition of equity shares of an affiliate of the small business directly from the affiliate, or iv the acquisition of prescribed limited partnership units; e the funds paid by the venture capital corporation for i any equity shares referred to in paragraph (d) (iii) are in turn invested in equity shares of the small business by the affiliate within the time limits prescribed under section 8 (2), or ii any limited partnership units referred to in paragraph (d) (iv) are in turn invested in equity shares in one or more small businesses by the limited partnership within the time limits prescribed under section 8 (2); f the investment is not and will not be prohibited under sections 12 to 15. 1.1 Subsection (1) (a) does not apply in respect of a small business in which a venture capital corporation previously invested at a time when the small business had fewer than 100 employees. 2 Despite subsection (1) (a), if a a small business and another company are affiliates only because one of them is controlled by one person and the other by one or more persons described in paragraph (e) or (f) of the definition of "associate" in section 1 (1), and b the administrator is satisfied that the small business and the other company do not have any agreement, commitment or understanding to conduct, in concert, any business, then, in calculating the number of employees under subsection (1) (a), the administrator must not count the employees of the affiliate of the small business. 3 A regulation made for the purposes of subsection (1) (b) or (c) may provide differently for different business activities. Repealed 11 [Repealed 2003-8-10.] Investment for certain purposes prohibited 12 1 Subject to subsection (3), a venture capital corporation must not make or hold an investment in a small business if all or part of the proceeds of that investment are directly or indirectly used or intended to be used by the small business for any of the following purposes: a lending; b investment outside British Columbia; c investment in land, unless the investment is incidental or ancillary to the activities, prescribed for the purposes of section 10 (1) (c), of the small business; d acquiring securities other than equity shares from an affiliate of a small business, or units of a prescribed limited partnership, that complies with the criteria set out in section 10 (1) (d) (iii) and (iv); e purchasing goods or services from i the venture capital corporation, ii a director, officer or shareholder of the venture capital corporation, or iii an associate of a director, officer or shareholder of the venture capital corporation, other than iv services of the type described in section 3 (1) (f) (ii) that are purchased at fair market value by the small business, or v goods or services that are sold at fair market value to the small business in the ordinary course of the seller's business as a seller of such goods or services on the open market; f payment of all or part of a debt obligation, unless i the administrator considers that the payment is necessary for the financial viability of the small business, or ii the debt obligation was incurred with the prior approval of the administrator in anticipation of an investment in the small business by the venture capital corporation; g as part of a transaction or series of transactions directly or indirectly involving any of the following: i the purchase or redemption of previously issued shares or convertible rights of the small business or one of its affiliates; ii the retirement of any part of a liability to a shareholder of the small business or one of its affiliates or to a shareholder's associate or affiliate; iii the payment of dividends; iv except in prescribed circumstances, the funding of all or part of the purchase by the small business of all or a substantial portion of the assets of a proprietorship, partnership, joint venture, trust or corporation; v the funding of all or part of the purchase by the small business of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased; vi other prescribed events; h other prescribed purposes. 2 If a small business issues equity shares to a venture capital corporation in payment of all or part of a debt obligation that is the subject of an approval under subsection (1) (f) (ii), the original principal amount of all or part, as the case may be, of the debt obligation must, for the purposes of the definition of "equity capital" in section 1, be treated as if it were money received by the small business. 3 Subsection (1) does not prohibit a venture capital corporation from making or holding an investment in a small business if the administrator is satisfied that the funds invested by the venture capital corporation were raised other than through the issue of approved equity capital. Control of small business prohibitions 13 1 Subject to subsection (2), a venture capital corporation must not make or hold an investment in a small business if it and any other venture capital corporation or corporations or employee venture capital corporation or corporations, either alone or in conjunction with one or more of their a associates or affiliates, b shareholders or their associates or affiliates, c directors or their associates, or d officers or their associates, will own, directly or indirectly, shares or convertible rights carrying 50% or more of the votes for the election of directors of the small business or will, in any manner, control the small business. 2 If the administrator considers that a small business in which a venture capital corporation has made an eligible investment is in financial difficulty, the administrator may permit that corporation to temporarily control the small business under circumstances and on terms and conditions that the administrator may determine. Non-arm's length investment prohibited 14 1 A venture capital corporation must not make or hold an investment in a small business if any of the shares of the venture capital corporation are held by a major shareholder who is, or was at any time during the 2 years immediately preceding the investment, any of the following: a a major shareholder of the small business; b an associate of a major shareholder of the small business; c a voting trust for which the trustee votes shares of the small business; d the small business or an associate or affiliate of the small business. 2 A venture capital corporation must not make or hold an investment in a small business if the small business or an associate, affiliate, director, officer or shareholder of the small business provides or has provided, directly or indirectly, as part of any transaction or series of transactions, a loan, guarantee or any other financial assistance to any of the following: a the venture capital corporation; b an associate or affiliate of the venture capital corporation; c a director, officer or shareholder of the venture capital corporation; d a member of any common interest group in respect of the venture capital corporation; e another person, for the purpose of that person making an investment in the venture capital corporation. Aggregate venture capital corporation investment 15 1 A venture capital corporation must not make an investment in a small business if, as a result of that investment, the aggregate of all amounts received by that small business, and any affiliates of that small business, a from the venture capital corporation, directly or indirectly, would be greater than the prescribed amount, or b from the venture capital corporation and any other venture capital corporation or corporations, directly or indirectly, would be greater than the prescribed amount for the prescribed period. 2 For the purposes of subsection (1), if in the opinion of the administrator one of the reasons for the separate existence of 2 or more small businesses is to increase the amount received from one or more venture capital corporations, the small businesses are deemed to be one small business. Action to be taken if investment becomes prohibited 16 1 If an investment of a venture capital corporation becomes prohibited under sections 12 to 15, the venture capital corporation must, within 6 months after the investment became prohibited, dispose of that investment unless, within the 6 month period, the circumstances that caused the investment to be prohibited are changed to the extent that it is no longer prohibited under those sections. 2 If the administrator is satisfied that noncompliance with a provision of sections 12 to 15 by the venture capital corporation occurred even though its officers and directors exercised the degree of care, diligence and skill to ensure compliance with sections 12 to 15 that a reasonably prudent person would have exercised in comparable circumstances, the administrator may, with or without conditions the administrator may require in any particular case, relieve the venture capital corporation for a period the administrator considers appropriate from the consequences of the noncompliance. Changes in eligibility 17 1 If a small business in which a venture capital corporation has made an eligible investment ceases to conform to section 10 (1) (b) or (c), the venture capital corporation must dispose of the investment within 6 months after the small business ceases to conform to section 10 (1) (b) or (c). 2 Subsection (1) does not apply if, within the 6 months referred to in subsection (1), the circumstances that caused the non-conformance with section 10 (1) (b) or (c) are changed so that the small business again conforms with section 10 (1) (b) or (c). 3 The administrator by written order may a relieve a venture capital corporation from the requirement under subsection (1) to dispose of the investment to which subsection (1) applies, or b extend the period within which the disposition must be made for an additional period not exceeding 6 months, if the administrator is satisfied that c the prescribed requirements, if any, are met, d the small business' non-conformance with section 10 (1) (b) or (c) was not imminent at the time the venture capital corporation made the investment, and e the small business did not use any of the investment proceeds it received for any purposes set out in section 12 before ceasing to conform to section 10 (1) (b) or (c). Permitted investments and authorized expenses 18 1 A venture capital corporation must not make any investments other than investments in the following: a subject to a condition of the administrator under section 9 (c), eligible investments; b liquid reserves on deposit in British Columbia at a savings institution; c a security, as defined in the Securities Act , of a small business, the equity shares of which would qualify as an eligible investment; d the investment protection account under section 19; e any other prescribed investment. 2 The annual expenses of a venture capital corporation must not be greater than a prescribed amount, determined in the prescribed manner. 3 The amount prescribed for the purposes of subsection (2) and the manner prescribed for determining it may be different for venture capital corporations with different amounts of issued equity capital. Investment protection account 19 1 A venture capital corporation must pay an amount of money, equal to 30% of all amounts received by it as equity capital, into an investment protection account that meets criteria and complies with conditions established by the administrator. 2 Subsection (1) does not apply if money that would otherwise be required to be paid into the investment protection account will, in the opinion of the administrator, be used to acquire an eligible investment. 3 If the administrator is satisfied that a a venture capital corporation has made an eligible investment, or will use the money to immediately make an eligible investment, and b the sum of i the amount to be paid out of the account, ii any amounts previously paid out of the account, and iii any money described in subsection (2) that has been previously used to acquire an eligible investment is equal to or less than 37.5% of the venture capital corporation's aggregate eligible investments, the administrator must, subject to subsection (8), authorize payment out of the investment protection account to the venture capital corporation in accordance with subsection (4). 4 The amount to be paid under subsection (3) is the lesser of a 37.5% of the purchase price paid or to be paid for the eligible investment, or b the total amount in the account. 5 If a the administrator certifies that money is payable to the Minister of Finance under section 22, and b there is sufficient money in the investment protection account to pay all or part of the amount payable, the money must be paid to the Minister of Finance. 6 Interest earned on money in the investment protection account is payable to the venture capital corporation. 7 Despite subsection (6), if a the registration of a venture capital corporation is revoked under section 28, or b a venture capital corporation fails to comply with section 8 (1) and (2), the corporation must pay or cause to be paid to the government all income earned in respect of the investment protection account between the time the account was opened and the time of revocation or the time at which the period referred to in section 8 (2) expires. 8 The administrator may refuse an authorization under subsection (3) if the administrator considers that a the venture capital corporation is contravening or has contravened this Act or the regulations, or b the administrator considers that the venture capital corporation or any of its directors, officers or shareholders are conducting the business or affairs of the venture capital corporation in a manner that is contrary to this Act. 9 If a venture capital corporation acquires shares of its own issue and the administrator is satisfied that no tax credits under section 21 of the Income Tax Act have been or will be issued or paid in respect of those shares, the administrator may authorize an amount calculated in the prescribed manner to be paid out of the investment protection account to the venture capital corporation. Tax credit or grant 20 1 In this section: investing entity means a an entity that meets prescribed criteria, or b a person, as defined in the Interpretation Act , who meets prescribed criteria; person means a an individual to whom section 2 (1) of the Income Tax Act applies, or b a corporation to which section 2 (2) of the Income Tax Act applies. 2 A regulation for the purpose of paragraph (a) or (b) of the definition of "investing entity" in subsection (1) may provide differently for different classes of entities or persons. 3 A venture capital corporation, on behalf of its shareholders who are persons, must apply to the administrator, in a form approved by the administrator, for a tax credit certificate entitling each of those shareholders to a tax credit under section 21 of the Income Tax Act , equal to 30% of the amount received by the venture capital corporation from those shareholders for those shares, in the then current calendar year or, in the case of a shareholder who is an individual and who makes an election referred to in section 21 (16) of the Income Tax Act , in the 60 days immediately following that calendar year. 4 If a venture capital corporation makes an application under subsection (3), the administrator, following the approval of the minister responsible for the Income Tax Act and in accordance with the provisions of section 21 of the Income Tax Act , must issue a tax credit certificate in the amount referred to in subsection (3), unless a the venture capital corporation is contravening or has contravened this Act or the regulations, or b the administrator considers that the venture capital corporation or its directors, officers or shareholders are conducting the business or affairs of the venture capital corporation in a manner that is contrary to this Act. 5) and (6 [Repealed 2003-8-16.] 7 The administrator must not issue a tax credit certificate under subsection (4) unless the administrator is satisfied that all of the following requirements are met: a the venture capital corporation has established and maintained the investment protection account as required under section 19; b no tax credit under this section has been previously allowed or paid for those shares; c the equity capital, in respect of which the tax credit applied for, consists of equity capital of the venture capital corporation that has been approved in accordance with section 9; d the share, in respect of which the tax credit applied for, is not a type of security that entitles the holder to claim a tax credit against tax payable under the Income Tax Act (Canada) with respect to the purchase of that share unless the Lieutenant Governor in Council has, by regulation, designated such a credit to be exempt from the provisions of this paragraph; e the shareholder has acquired the share directly from the venture capital corporation or its agent acting in that behalf; f the shareholder, if an individual, was resident in British Columbia at the date the shareholder subscribed for the shares. 8 [Repealed 1998-42-48.] 9 A tax credit certificate issued under subsection (4) may be revoked by the administrator if the administrator determines that, at the time the tax credit certificate was issued or at a subsequent time, the venture capital corporation was in contravention of this Act or the regulations. 10 A certificate that is revoked by the administrator is deemed never to have been issued. 11 The administrator must promptly give a venture capital corporation a notice of a refusal to issue a tax credit certificate under subsection (4) to the venture capital corporation, and b the reasons for the refusal. 12 The administrator must promptly give a venture capital corporation and the minister responsible for the administration of the Income Tax Act a notice of revocation of a tax credit certificate issued under subsection (4) to the venture capital corporation, and b the reasons for the revocation. Repealed 21 [Repealed 2003-8-17.] Repayment of tax credit or grant 22 1 If a venture capital corporation directly or indirectly acquires one of its own shares, the venture capital corporation must pay to the Minister of Finance an amount of money calculated in accordance with subsection (2). 2 If a venture capital corporation acquires one or more of its own shares for a total consideration that a is equal to or greater than that for which the share was issued, the venture capital corporation must pay to the Minister of Finance an amount of money equal to 30% of the consideration paid to the venture capital corporation by the shareholder for the share at the time the share was issued, or b is less than that for which the share was issued, the venture capital corporation must pay to the Minister of Finance an amount equal to 30% of the greater of i the consideration paid by the venture capital corporation for the acquisition of the share, or ii the amount that the administrator considers was the fair market value of the share, at the time it was acquired, but the amount under this subparagraph must not be greater than the consideration that was paid to the venture capital corporation for the issue of those shares. 3 If a venture capital corporation a is deemed to have acquired a share under section 23, or b is deemed under section 25 (i) to have acquired all of its shares, the venture capital corporation must pay to the Minister of Finance an amount equal to 30% of the consideration paid to the venture capital corporation in respect of the issue of that share or those shares. 3.1 If the administrator considers that a venture capital corporation has a conducted its business and affairs in a manner consistent with this Act, and b incurred investment losses, the administrator may reduce the amount that would otherwise be payable under subsection (3) in order to take the investment losses into account. 3.2 If the administrator considers that a venture capital corporation has a conducted its business and affairs in a manner consistent with this Act, and b held an eligible investment for at least 2 years, the administrator may reduce the amount that would otherwise be payable under subsection (3) by an amount calculated as follows: c firstly, multiply that amount otherwise payable by the number of days the venture capital corporation held the eligible investment; d secondly, divide the product obtained under paragraph (c) by 1825 to determine the amount of the reduction. 3.3 If a venture capital corporation has complied with section 8 (2) throughout the period prescribed for the purpose of that section, no amount is payable under this section. 4 For the purposes of this section, a venture capital corporation is deemed to have acquired one of its own shares at the time the shareholder disposing of the share first receives consideration from the venture capital corporation in relation to that disposition. 5 The amount to be paid to the Minister of Finance under this section is a debt due to the government. 6 The amount to be paid to the Minister of Finance under this section must not be greater than the aggregate amount of the tax credits issued in respect of a venture capital corporation's own shares that are acquired or deemed under this section to be acquired by it. Voluntary reductions in capital 23 For the purposes of section 22, a venture capital corporation is deemed to have acquired a share if it does any of the following: a cancels, under section 82 of the Business Corporations Act , a share surrendered to the corporation by way of gift; b passes a special resolution reducing its capital under section 74 (1) (b) of the Business Corporations Act or reduces its capital in accordance with the authorization provided by a court order referred to in section 74 (1) (a) or (b) of that Act; c redeems or purchases shares in the manner set out in section 77 of the Business Corporations Act . Voluntary cancellation 24 1 If a venture capital corporation does all of the following, the administrator must cancel that venture capital corporation's registration: a passes a special resolution requesting cancellation of its registration; b passes a resolution under section 257 (2) (b) of the Business Corporations Act to change its name to delete "(VCC)" from it; c presents proof satisfactory to the administrator that it has complied with sections 19 (5) and (7) and 22 of this Act. 2 On cancellation under subsection (1), the corporation may carry on business in accordance with the Business Corporations Act . Repayment on cancellation, dissolution or winding up 25 If a venture capital corporation a has its registration under this Part revoked, b is dissolved under section 422 of the Business Corporations Act , c is dissolved under section 423 of the Business Corporations Act , d passes a resolution under section 314 (1) (a) or (2) of the Business Corporations Act to be dissolved, e passes a resolution under section 319 of the Business Corporations Act to authorize the liquidation of the corporation, f has been ordered under section 227 (3) (o) or 324 (1) or (3) (a) of the Business Corporations Act to liquidate and dissolve, g without first obtaining approval of the amalgamation from the administrator, with or without conditions, under section 7 of this Act, i enters into an amalgamation agreement under section 270 (1) of the Business Corporations Act , ii passes a resolution under section 273 (b) or 274 (a) of that Act to approve an amalgamation, or iii authorizes an amalgamation under section 284 (2) of that Act, or h passes a resolution requesting cancellation under section 24, the venture capital corporation i is deemed, for the purposes only of section 22 (3), to have acquired all its shares at the time the event referred to in paragraphs (a) to (h) of this section occurs, and j must make payment to the Minister of Finance as required by section 22 (3). Liability for repayment of tax credit or grant 26 1 In this section, third party means a a director or officer of a i venture capital corporation, or ii small business in which an investment under section 10 was made by a venture capital corporation, b a member of a common interest group that controls a i venture capital corporation, or ii small business described in paragraph (a), or c a major shareholder of a i venture capital corporation, or ii small business described in paragraph (a). 1.1 If a third party authorizes or acquiesces in a a transaction or event, or b series of transactions or events, that the third party knew or reasonably ought to have known at the time of the authorization or acquiescence would render a venture capital corporation liable to the Minister of Finance to make the payment required under section 22, then the third party is jointly and severally liable for the amount of the payment. 2 If, a on the basis of information supplied by a director, officer or shareholder of a venture capital corporation, a tax credit certificate has been issued under section 20, b that information is false or misleading, and c the director, officer or shareholder knew, or ought to have known, that it was false or misleading, the director, officer or shareholder who supplied it is liable to pay to the government the amount of the tax credit. Repealed 27 [Repealed 2003-8-21.] Revocation and suspension of registration 28 1 The administrator may suspend or revoke a registration of a venture capital corporation in any of the following circumstances: a the corporation obtained its registration fraudulently or by furnishing false or misleading information or documents; b the corporation fails to supply information or records when they are required under this Act; c the corporation supplied information or records referred to in paragraph (b) that contain false or misleading information; d the corporation fails to comply with this Act, the regulations or a condition or condition of approval that the administrator may impose, make or give under this Act; e [Repealed 2003-8-22.] f the corporation has no remaining eligible investments that are subject to section 8 (2). 2 If the administrator suspends a registration under subsection (1), the administrator may a attach conditions to be complied with by the suspended venture capital corporation during the period of suspension, and b reinstate the registration with or without conditions. 3 Despite subsections (1) and (2), if the administrator considers that a venture capital corporation is conducting its business and affairs in a manner consistent with this Act, the administrator may do any of the following: a for any time that the administrator considers appropriate, refrain from revoking the registration of the venture capital corporation; b permit registration of the venture capital corporation and, for any time that the administrator considers appropriate, refrain from revoking the registration of the venture capital corporation; c issue a tax credit certificate; d reduce the amount that would otherwise be required to be deposited into the investment protection account referred to in section 19. 2 Eligible Business Corporation Tax Credits Definitions 28.1 In this Part: additional equity capital means additional equity capital raised by an eligible business corporation under an approval granted to it under section 28.3 by the administrator; eligible investor means a a corporation to which section 2 (2) of the Income Tax Act applies, except a venture capital corporation, or b an individual to whom section 2 (1) of the Income Tax Act applies. Registration 28.2 1 On application by a small business, in a form approved by the administrator, the administrator may register the small business as an eligible business corporation, if satisfied that the applicant a conforms to paragraphs (a) to (c) of section 10 (1), b has equity capital of at least $25 000, and c meets other prescribed requirements. 1.1 For the purposes of subsection (1) (b), the definition of "equity capital" in section 1 is to be read as if the reference to "equity shares" were a reference to "shares". 2 On registration of a small business as an eligible business corporation, the administrator must issue a certificate of registration, in a form approved by him or her, and record in the certificate the date of registration. Additional equity capital 28.3 1 An eligible business corporation may apply to the administrator for approval to raise additional equity capital and the administrator may grant the approval, subject to subsection (2) and to any conditions that the administrator may impose, if the administrator is satisfied that the capital will consist of equity shares that a [Repealed 2006-15-38.] b do not carry rights and restrictions attached to the shares or convertible rights that i create a debt between the holder or beneficial owner of the shares or convertible rights and any other person, ii entitle the holder or beneficial owner of the shares or convertible rights to reduce the impact of any loss the holder or beneficial owner sustains in holding or disposing of the share or convertible right, iii provide the holder or beneficial owner of the share or convertible right with the right to require the eligible business corporation to repurchase the shares or convertible rights before the expiry of 5 years after the date of issue, or iv are prohibited by regulation, c do not carry 50% or more of the votes for the election of directors of the eligible business corporation, and d are fully paid for in cash. 2 It is a condition of an approval under subsection (1) to raise additional equity capital that the eligible business corporation must not issue any of the shares or convertible rights comprised in the additional equity capital to a person that, at any time during the 2 years immediately preceding the date of issue, has disposed of a share of any class of shares or of a convertible right of any class of convertible rights issued by the eligible business corporation. 3 Conditions imposed by the administrator under subsection (1) may include, but are not limited to, a condition that the additional equity capital be issued only for the purposes of investment in a small business that is substantially engaged, determined in the prescribed manner, in British Columbia in a a prescribed business activity, or b a business activity described in the regulations that is specified by the administrator in the condition. Eligible new corporations 28.31 1 Subject to this section, for the purposes of section 29.1 (1) (a.1), an eligible new corporation is an eligible business corporation that is incorporated for less than 2 years before the eligible business corporation is granted approval to raise additional equity capital under section 28.3. 2 An eligible business corporation is not an eligible new corporation if a subject to subsection (3), the business carried on by the eligible business corporation is principally the same business as that previously carried on as all or part of the business of a sole proprietorship, partnership, joint venture, trust or corporation, b the eligible business corporation results from an amalgamation or merger of corporations, or c the administrator is satisfied that, as a result of a transaction or an event, or a series of transactions or events, property of a business has been transferred, either directly or indirectly, to the eligible business corporation for the principal purpose of enabling the eligible business corporation to be an eligible new corporation.

3 Subsection (2) (a) does not apply to an eligible business corporation if the business was previously carried on as all or part of the business of a sole proprietorship, partnership or joint venture for a period of 90 days or less before the eligible business corporation's date of incorporation. Aggregate investment by eligible investor 28.4 1 An eligible investor must not make or hold an investment in an eligible business corporation if, as a result of that investment, the aggregate of all amounts of additional equity capital received by that eligible business corporation from all eligible investors, directly or indirectly, would be greater than $10 million. 2 For the purposes of subsection (1), if in the opinion of the administrator one of the reasons for the separate existence of 2 or more eligible business corporations is to increase the amount received from one or more eligible investors, the eligible business corporations are deemed to be one eligible business corporation. Control of eligible business — prohibitions 28.5 1 Subject to subsection (2), an eligible investor must not make or hold an investment in an eligible business corporation if the eligible investor, either alone or in conjunction with one or more of the eligible investor's a associates or affiliates, b shareholders or their associates or affiliates, c directors or their associates, or d officers or their associates, will own, directly or indirectly, shares or convertible rights carrying 50% or more of the votes for the election of directors of the eligible business corporation or will, in any manner, control the eligible business corporation. 2 If the administrator considers that an eligible business corporation in which an eligible investor has invested is in financial difficulty, the administrator may permit that eligible investor to temporarily control the eligible business corporation, under circumstances and on terms and conditions that the administrator may determine. Revocation and suspension of registration 28.6 1 The administrator may suspend or revoke the registration under this Part of an eligible business corporation if, in the opinion of the administrator, the eligible business corporation a has contravened this Act or the regulations or a condition that the administrator may impose, make or give under this Act, b has not complied with a condition referred to in subsection (2) (a), c has misrepresented any information to the administrator or to staff of the administrator, either knowingly or through circumstances amounting to negligence, d has applied any proceeds of additional equity capital for a use prohibited under section 28.93, e at any time during the 5 years immediately following the date on which the eligible business corporation raises any additional equity capital, does not conform to section 10 (1) (b) or (c), or f has not raised any additional equity capital within 2 years of the eligible business corporation's registration under section 28.2. 2 If the administrator suspends a registration under subsection (1), the administrator may a attach conditions to be complied with by the suspended eligible business corporation during the period of suspension, and b reinstate the registration with or without conditions. 3 An eligible business corporation or an associate, affiliate, director, officer or shareholder of an eligible business corporation must not provide, directly or indirectly, as part of any transaction or series of transactions, a loan, loan guarantee or any other financial assistance to any person for the purpose of, or in connection with, a purchase of shares or convertible rights that are part of any additional equity capital. 4 An eligible business corporation must not redeem a share or convertible right for which a tax credit certificate has been issued under this Part, unless the redemption occurs a more than 5 years after the date of issue of the share or convertible right, or b in prescribed circumstances. 5 An eligible business corporation must not register a transfer of a share or convertible right for which a tax credit has been issued under this Act if the transferor of the share or convertible right is a the original purchaser of the share or convertible right, a.1 a TFSA of which the original purchaser of the share or convertible right is the TFSA holder, or b a registered retirement savings plan or registered retirement income fund of which plan or fund the original purchaser of the share or convertible right or his or her spouse is a beneficiary or annuitant, unless the transfer occurs c more than 5 years after the date of issue of the share or convertible right, or d in prescribed circumstances. Consequences of revocation 28.7 1 If, under section 28.6, the administrator revokes the registration of an eligible business corporation after it has raised additional equity capital, the small business whose registration as an eligible business corporation has been revoked must pay to the Minister of Finance, subject to subsection (2), an amount equal to the aggregate of all the amounts of tax credits issued for the additional equity capital. 2 For the purpose of this section, the Lieutenant Governor in Council may prescribe an amount less than the amount described in subsection (1), in which case the small business must pay to the Minister of Finance that lesser amount. 3 If, under section 28.6, the administrator revokes the registration of an eligible business corporation before the eligible business corporation has raised additional equity capital, the administrator must not issue the tax credit certificate referred to in section 28.95. Liability of officers and directors 28.8 1 In this section, third party means a a director or officer of a small business that is or was registered as an eligible business corporation, b a member of a common interest group that controls a small business described in paragraph (a), or c a major shareholder of a small business described in paragraph (a). 2 If a third party authorizes or acquiesces in a a transaction or event, or b series of transactions or events that the third party knew or reasonably ought to have known at the time of the authorization or acquiescence would render the eligible business corporation liable to the Minister of Finance to make the payment required under section 28.7, then the third party is jointly and severally liable for the amount of the payment. Voluntary cancellation of registration 28.9 1 On the written request of an eligible business corporation, the administrator may cancel the eligible business corporation's registration under this Part if a it pays to the Minister of Finance the aggregate of all the amounts of tax credits issued in the immediately preceding 5 years for shares or convertible rights issued by it as part of an issue of additional equity capital, and b it meets prescribed requirements. 2 If the administrator considers that an eligible business corporation that makes the request under subsection (1) a has conducted its business and affairs in a manner consistent with this Act, and b for at least 2 years has complied with this Part in relation to all the shares or convertible rights for which a tax credit has been issued, the administrator may reduce the amount that would otherwise be payable under subsection (1) by an amount calculated as follows: c firstly, multiply that amount otherwise payable by the number of days during which the shares or convertible rights referred to in paragraph (b) remained outstanding; d secondly, divide the product obtained under paragraph (c) by 1825 to determine the amount of the reduction. 3 If the administrator considers that an eligible business corporation that makes the request under subsection (1) a has conducted its business and affairs in a manner consistent with this Act, and b has incurred investment losses, the administrator may reduce the amount that would otherwise be payable under subsection (1) in order to take the investment losses into account. Repayment of tax credits on early redemption, acquisition or cancellation of shares or convertible rights 28.91 1 Except in prescribed circumstances, if an eligible business corporation, within 5 years after it issues a share or convertible right for which a tax credit certificate was issued under this Part, redeems, acquires or cancels the share or convertible right, then the eligible business corporation must pay to the Minister of Finance an amount equal to the tax credit allowed for the share or convertible right. 2 The Lieutenant Governor in Council may make regulations requiring eligible business corporations who owe money payable to the Minister of Finance under subsection (1) to pay interest on the money at a prescribed rate and calculated from a prescribed date. 3 If the administrator considers that an eligible business corporation a has conducted its business and affairs in a manner consistent with this Act, and b for at least 2 years, has not redeemed, acquired or cancelled a share or convertible right issued by it for which a tax credit certificate was issued under this Part, the administrator may reduce the amount that would otherwise be payable under this section by an amount calculated as follows: c firstly, multiply that amount otherwise payable by the number of days during which the share or convertible right referred to in paragraph (b) remained outstanding; d secondly, divide the product obtained under paragraph (c) by 1825 to determine the amount of the reduction. 4 If the administrator considers that an eligible business corporation a has conducted its business and affairs in a manner consistent with this Act, and b has incurred investment losses, the administrator may reduce the amount that would otherwise be payable under this section in order to take the investment losses into account. Repayment of tax credits — other share or convertible right dispositions 28.92 1 If a person, within 5 years after the date of purchasing a share or convertible right for which a tax credit has been issued under this Part and in a transaction other than a redemption, acquisition or cancellation referred to in section 28.91, disposes of a share or convertible right for which a tax credit was issued under this Part, then the person must pay to the Minister of Finance an amount equal to the tax credit allowed for the share or convertible right. 2 The Lieutenant Governor in Council may make regulations requiring persons who owe money payable to the Minister of Finance under subsection (1) to pay interest on the money at a prescribed rate and calculated from a prescribed date. Prohibited use of funds 28.93 An eligible business corporation must not use, directly or indirectly, any funds raised by an issue of shares or convertible rights for which tax credits have been or are entitled to be claimed under section 28.95 for any of the following purposes: a lending; b investment outside British Columbia; c investment in land, unless the investment is incidental or ancillary to the business activities, referred to in section 10 (1) (c), of the eligible business corporation; d acquiring securities other than equity shares from an affiliate of an eligible business corporation that complies with the criteria set out in section 10 (1) (a) to (c); e purchasing goods or services from i an eligible investor whose investment is in the eligible business corporation, or ii an associate of an eligible investor whose investment is in the eligible business corporation other than goods or services that are sold at fair market value to the eligible business corporation in the ordinary course of the seller's business as a seller of such goods or services on the open market; f payment of all or part of a debt obligation, unless i the administrator considers that the payment is necessary for the financial viability of the eligible business corporation, or ii the debt obligation was incurred with the prior approval of the administrator in anticipation of an investment in the eligible business corporation by an eligible investor; g as part of a transaction or series of transactions directly or indirectly involving any of the following: i the purchase or redemption of previously issued shares or convertible rights of the eligible business corporation or one of its affiliates; ii the retirement of any part of a liability to a shareholder of the eligible business corporation or one of its affiliates or to a shareholder's associate or affiliate; iii the payment of dividends; iv except in prescribed circumstances, the funding of all or part of the purchase by the eligible business corporation of all or a substantial portion of the assets of a proprietorship, partnership, joint venture, trust or corporation; v the funding of all or part of the purchase by the eligible business corporation of any of the assets of a proprietorship, partnership, joint venture, trust or corporation at a price that is greater than the fair market value of the assets purchased; vi other prescribed events; h other prescribed purposes. Application for tax credits 28.94 An eligible business corporation that in any calendar year has raised additional equity capital must apply to the administrator, in a form approved by the administrator, for tax credit certificates entitling each eligible investor, in relation to additional equity capital, to a tax credit under section 21 of the Income Tax Act equal to 30% of the amount received by the eligible business corporation in that calendar year or, in the case of a shareholder who is an individual and who makes an election referred to in section 21 (16) of the Income Tax Act , within 60 days after the end of that calendar year, for the shares or convertible rights that were a part of the additional equity capital, and b issued to the eligible investors. Tax credit certificates 28.95 1 The administrator, following the approval of the minister responsible for the administration of the Income Tax Act and in accordance with section 21 of that Act, must issue a tax credit certificate in the amount calculated in accordance with section 28.94 to each of the eligible investors referred to in section 28.94 if the administrator is satisfied as to all of the following matters: a the eligible business corporation is conducting its business or affairs in a manner consistent with this Act; b the eligible business and its eligible investors are complying with this Act and the regulations; c no tax credit under this section has been previously allowed or paid for the shares or convertible rights; d the equity capital, that is the subject of the application for the tax credit, consists of equity capital of the eligible business corporation that has been approved in accordance with section 28.3; e the shares or convertible rights, for which the eligible business corporation applies to the administrator for tax credits, are not a type of security that entitles its holders to claim a tax credit against tax payable under the Income Tax Act (Canada) for the purchase of the security; f the eligible investor shareholders acquire the shares or convertible rights directly from the eligible business corporation or its agent acting in that behalf; g the eligible investor shareholder, if an individual, is resident in British Columbia at the date of subscribing for the shares or convertible rights; h any other prescribed conditions are met. 2 A tax credit certificate issued under this section may be revoked by the administrator, if the administrator considers that, at the time the tax credit certificate was issued or at a subsequent time, the eligible business corporation was in contravention of this Act or the regulations. 3 If the administrator refuses to issue a tax credit certificate under this section, the administrator must promptly give notice of that refusal, together with reasons for the refusal, to the eligible business corporation. 4 If the administrator revokes a tax credit certificate issued under this section, the administrator must promptly give notice of that revocation, together with reasons for the revocation, to the eligible business corporation and to the minister responsible for the administration of the Income Tax Act . Payment to government where no entitlement 28.96 If a person has received, directly or indirectly, the benefit of a tax credit to which the person is not entitled, the person must repay the amount of the benefit forthwith to the Minister of Finance. Annual reporting 28.97 1 Within 6 months after its fiscal year end, an eligible business corporation must prepare an annual report in a form approved by the administration and file the report with the administrator accompanied by each of the following: a a copy of the register of allotments, members and transfers of the eligible business corporation; b a copy of the most recent financial statements of the eligible business corporation that have been reviewed by a chartered professional accountant or other person who is a licensed or registered member of an accounting association; c a copy of the most recent annual report filed with the registrar of companies. 2 An eligible business corporation must comply with subsection (1) in each of the 5 consecutive fiscal years following the date of its most recent issue of shares or convertible rights as part of the raising of additional equity capital. 3 General Reporting requirements 29 Within 6 months after its fiscal year end, a venture capital corporation must prepare and file with the administrator a return setting out prescribed information. Annual maximum venture capital incentive 29.1 1 The Lieutenant Governor in Council may make regulations a prescribing an amount to be known as the annual maximum venture capital tax credit, a.1 allocating a portion of the annual maximum venture capital tax credit to eligible new corporations under section 28.31, and b allocating portions of the annual maximum venture capital tax credit to one or more prescribed business activities, business activities described in the regulations or portions of those business activities. 2 If in any year the minister considers that, in respect of the issue of a [Repealed 2010-21-201.] b equity capital approved under section 9, and c additional equity capital approved to be raised under section 28.3 in that year, the total of the amounts that will be d payable under section 21 (3) or (5) of the Income Tax Act , e paid under section 21 (3) or (5) of the Income Tax Act , f deductible under section 21 of the Income Tax Act , and g deducted under section 21 of the Income Tax Act will be greater than the aggregate of the annual maximum venture capital tax credit prescribed under subsection (1) of this section, the administrator must not approve, for the remainder of that year, h any issue of equity capital under section 9 of this Act in respect of shares that are proposed to be issued to persons as defined in section 20 (1) of this Act, or i the raising of any additional equity capital under section 28.3 of this Act in respect of shares or convertible rights that are proposed to be issued to eligible investors. 3 If in any year the minister considers that, in respect of the issue of a [Repealed 2010-21-201.] b equity capital approved under section 9, and c equity capital approved to be raised under section 28.3 of this Act in that year, the total of the amounts that will be d payable under section 21 (3) or (5) of the Income Tax Act , e paid under section 21 (3) or (5) of the Income Tax Act , f deductible under section 21 of the Income Tax Act , and g deducted under section 21 of the Income Tax Act will be greater than the aggregate of the annual maximum venture capital tax credit prescribed under subsection (1), h the minister may suspend further registrations of venture capital corporations and eligible business corporations under this Act for that year, and i the administrator must not approve, for the remainder of that year, of any additional issue of additional equity capital under section 9 of this Act or of the raising of additional equity capital under section 28.3 of this Act. Examination of records 30 1 During normal business hours, the administrator or a person designated by the administrator may make an examination of the affairs of a a venture capital corporation or eligible business corporation, b a corporation that was a venture capital corporation or eligible business corporation, or c a small business, corporation or other entity, or an affiliate of the small business, corporation or other entity, in which a venture capital corporation has made an investment, for the purpose of determining whether or not the venture capital corporation, eligible business corporation or corporation that was a venture capital corporation or eligible business corporation is complying with or has complied with this Act and the regulations. 2 For the purposes of determining compliance under this Act, the administrator or person making the examination under this section a is entitled to unrestricted access without charge to all records, securities cash and savings institution accounts of i the venture capital corporation, eligible business corporation, small business, corporation or other entity being examined, or ii an affiliate of any of them, and b may make copies of any record or security to which he or she is entitled to unrestricted access. Investigation 31 1 The administrator may, by order, a appoint a person to make whatever investigation the administrator considers appropriate for the administration of this Act, and b determine the scope of the investigation. 2 On the application of the administrator or the investigator appointed under subsection (1), and on being satisfied by information on oath that it is necessary and in the public interest for any purpose relating to an investigation under subsection (1), the Supreme Court may make an order authorizing the investigator a to enter into the premises or on the land of a person at any reasonable time for the purpose of carrying out an inspection or examination, b to require the production of any records, securities or things and to inspect or examine them, and c on giving a receipt, to remove any records, securities or things inspected or examined under paragraph (b) for the purpose of further inspection or examination. 3 An application for an order under subsection (2) must be made in the prescribed manner. 4 Unless the Supreme Court otherwise directs, an application for an order under subsection (2) may be a made without notice to any other person, and b heard in private. 5 Inspection or examination under subsection (2) must be completed as soon as practical and the records, securities or things must be promptly returned to the person who produced them. 6 A person must not withhold, destroy, conceal or refuse to give any information or produce any record, security or thing reasonably required under this section by the investigator. Investigator's power at hearing 32 1 An investigator appointed under section 31 has the same power as the Supreme Court has for the trial of civil actions a to summon and enforce the attendance of witnesses, b to compel witnesses to give evidence on oath or in any other manner, and c to compel witnesses to produce records, securities and things. 2 The failure or refusal of a witness a to attend, b to take an oath, c to answer questions, or d to produce the records, securities and things in the person's custody or possession makes the witness, on application to the Supreme Court, liable to be committed for contempt as if in breach of an order or judgment of the Supreme Court. 3 Section 34 of the Evidence Act does not exempt any financial institution, as defined in that section, or any officer or employee of the financial institution from the operation of this section. 4 A witness giving evidence at an investigation conducted under section 31 may be represented by counsel. Report to administrator 33 A person appointed under section 31 must provide the administrator with a complete report of the investigation made including any transcript of evidence and material in the person's possession relating to the investigation. Extension of time 34 The administrator may extend, with or without conditions, the time limit for the doing of anything under this Act and may grant the extension even if the time limit to be extended has expired. Offences 35 1 A person who does any of the following commits an offence: a makes a statement in any record, evidence or information submitted or given under this Act to the administrator, to a person working for or under the administrator or to a person conducting an investigation under section 31 that, at the time and in the light of the circumstances under which the statement is made, is false or misleading with respect to a material fact or that omits to state a material fact, the omission of which makes the statement false or misleading; b makes a statement in a proposal, report, return or other record required to be filed or furnished under this Act that, at the time and in the light of the circumstances under which the statement is made, is false or misleading with respect to a material fact or that omits to state a material fact, the omission of which makes the statement false or misleading; c withholds, destroys or conceals a record or thing referred to in section 30 (2) after it has been required by a person conducting an examination under that section; d contravenes section 31 (6); e impedes the investigator from entering premises under section 31 (2) (a). f [Repealed 2010-21-202.] 2 If a corporation is convicted of an offence under subsection (1) (a) to (d), the maximum fine that may be imposed is $100 000. 3 If a corporation commits an offence under subsection (1), every director or officer of the corporation who authorized, permitted or acquiesced in the offence also commits an offence. 4 If an individual commits an offence under subsection (1) (a) to (d) or (3), he or she is liable to a maximum fine of $50 000 or to imprisonment for not more than one year, or to both the fine and imprisonment. 5 A person does not commit an offence under this section in relation to a statement if the person did not know that the statement was false or misleading and, in the exercise of reasonable diligence, could not have known that the statement was false or misleading. 6 Section 5 of the Offence Act does not apply to this Act. Time limitation 36 A proceeding under this Act must not be commenced more than 2 years after the facts on which the proceedings are based first came to the knowledge of the administrator. Power to make regulations 37 1 The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act . 2 Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows: a for any purpose for which regulations are contemplated by this Act; b that the Lieutenant Governor in Council considers to be necessary or advisable and to be ancillary to the purposes of this Act; c defining any word or expression used but not defined in this Act; d requiring a person to make information returns respecting any class of information required in assessing compliance with this Act; e establishing periods of time to be taken into account in calculations or determinations under this Act; f describing business activities for the purposes of sections 9, 10, 28.3 and 29.1; g establishing conditions or restrictions on an activity being a business activity for the purposes of sections 9, 10, 28.3 and 29.1, which conditions or restrictions may relate to other matters, including whether a small business or eligible business corporation is or was substantially engaged in another business activity. 3 A regulation under subsection (2) (f) may do one or both of the following: a delegate a matter to the administrator; b confer a discretion on the administrator.