REVISED STATUTES, 1989
1 This Act may be cited as the Venture Corporations Act. R.S., c. 488, s. 1.
(iii) any trust or estate in which that person or that corporation has, in the opinion of the Minister, a substantial beneficial interest or as to which that person or that corporation serves as trustee or in a similar capacity,
(g) "equity share" means any share of any class of shares of a corporation carrying voting rights in all circumstances and any share of any class of shares carrying voting rights by reason of the occurrence of any contingency that has occurred and is continuing;
(ii) any other corporation in which Her Majesty in right of the Province, or an agency of Her Majesty or a corporation controlled by Her Majesty, owns equity shares and that is prescribed to be a venture corporation;
(j) "person" means, except as otherwise expressly provided, a corporation, individual, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator or other legal representative;
(n) "small business" means a corporation that, in combination with any affiliated corporation or corporations, has not more than one hundred employees or not more than such larger number of employees as may be prescribed.
(4) A corporation shall be deemed to be affiliated with another corporation if one of them is the subsidiary of the other or both are subsidiaries of the same corporation or each of them is controlled by the same person.
(a) shares of the first-mentioned corporation carrying more than fifty per cent of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of that other person or by or for the benefit of those other corporations; and
(6) In calculating the total number of equity shares of a corporation beneficially owned or controlled, for the purposes of this Act, the total number shall be calculated as the total of all the shares actually owned or controlled, but each share that carries the right to more than one vote shall be calculated as the number of shares equalling the total number of votes carried.
(7) In determining the number of shareholders of a corporation, for the purposes of this Act, two or more persons holding the same share or shares jointly shall be counted as one shareholder. R.S., c. 488, s. 2.
3 (1) The Minister shall maintain a register of Nova Scotia venture corporations in which he shall list all corporations registered under this Act as venture corporations and all corporations prescribed to be venture corporations.
(c) the authorized capital, the classes of shares, if any, into which it is to be divided, the number of shares in each class, and the aggregate consideration exceeding which all shares of any class may not be issued;
(4) The proposal shall be executed under the seal of the corporation and signed by two officers or by one director and one officer of the corporation, and compliance with this Section and with Section 5 shall be certified by the affidavit of one of the officers or directors signing the proposal. R.S., c. 488, s. 4.
(f) the total number of equity shares of the corporation beneficially owned, directly or indirectly, by one or more non-residents or over which one or more non-residents exercise control or direction does not exceed forty-nine per cent of the total number of issued and outstanding equity shares of the corporation; and
(3) Subject to Section 22, the Minister may revoke a registration where the registrant fails to comply, or to continue to comply, with any provision of this Act or of the regulations, including the requirements of Section 5.
(4) Where the Minister is of the opinion that the number of corporations registered under this Act will be sufficient to take up the amount of money that is appropriated as provided in Section 30 to be payable by way of equity loan under Section 19, the Minister may, subject to the approval of the Governor in Council, by order, suspend the further registration of corporations or the payment of equity loans under this Act for such period of time as is specified in the order.
(5) No order under subsection (4) shall operate to prevent the Minister from making an equity loan where the shares were fully paid for and beneficially owned by the shareholder before the making of the order. R.S., c. 488, s. 6.
8 (1) Before the end of its first year of registration under this Act, a venture corporation shall have equity capital of at least fifty thousand dollars and at least forty per cent of the amount of its equity capital shall be in eligible investments.
(2) Before the end of its second year of registration under this Act, a venture corporation shall have equity capital of at least one hundred thousand dollars and at least seventy per cent of its equity capital shall be in eligible investments.
(3) After the end of its second year of registration under this Act, a venture corporation shall at all times maintain an average of at least seventy per cent, calculated in the prescribed manner, on the last day of each month of the immediately preceding twelve months, of its equity capital in eligible investments.
(4) After the second year of its registration under this Act, a venture corporation shall at all times maintain equity capital of at least one hundred thousand dollars and not more than five million dollars. R.S., c. 488, s. 8.
9 (1) A venture corporation shall set aside in a trust fund an amount of money equal to one hundred per cent of any amount received by it as an equity loan, and the trust fund shall be held by the venture corporation, or by a trustee on behalf of the venture corporation, in trust to be dealt with in accordance with this Section.
(2) Subject to subsection (3), while any amount is held in trust under subsection (1) a venture corporation may pay from the fund an amount not in excess of five sevenths of the purchase price paid by the venture corporation to acquire any eligible investment.
(a) the investment is made in a small business and seventy-five per cent or more of the wages and salaries of the small business in its last completed fiscal period are paid or seventy-five per cent of its wages and salaries in its current fiscal period are reasonably expected to be paid to employees who are resident in the Province or in respect of operations in the Province;
(c) the investment is the purchase and acquisition from a small business by the venture corporation of equity shares issued by the small business or the granting of an unsecured loan to the small business, but, where the equity shares are issued, or the unsecured loan is granted, as part of a transaction involving the purchase, redemption or repayment, directly or indirectly, of any previously issued equity shares of, or any unsecured loan previously granted to the small business or an affiliated corporation, the investment is an eligible investment only to the extent that the investment represents net new equity capital calculated in the manner prescribed;
(e) the aggregate number of equity shares held by the venture corporation and by any affiliated corporation in the small business does not at any time exceed forty-nine per cent, determined in accordance with subsection (2), of all issued and outstanding equity shares of the small business;
(f) the aggregate number of equity shares held by the venture corporation, when combined with any equity shares held by one or more other venture corporations, does not at any time exceed sixty per cent, determined in accordance with subsection (2), of all issued and outstanding equity shares of the small business; and
(c) any equity shares, any convertible debt obligations and any options or rights of the small business beneficially owned or held by an associate or an affiliated corporation of the venture corporation or any shareholder of it, or an associate or affiliated corporation of any such shareholder.
(b) "unsecured loan" means a debt owing by a small business to a venture corporation that is not secured by a fixed or floating charge, by a hypothecation or pledge, by a guarantee or otherwise and the terms of which do not entitle the venture corporation, either absolutely or contingently, to convert or cause the conversion of the debt into a debt that is not an unsecured loan. R.S., c. 488, s. 10.
(ii) an officer or director of the venture corporation or an officer or director of a major shareholder of the venture corporation or an associate of any officer or director referred to in this subclause, or
(2) Unless a venture corporation is widely held, it shall not invest in a small business if the proceeds of that investment are used or are intended to be used, in whole or in part, to finance the purchase or sale of goods or services provided to that small business by or through any shareholder of the venture corporation or by or through any associate or affiliated corporation of any such shareholder.
(b) a venture corporation is widely held if the venture corporation has ten or more shareholders each holding not more than ten per cent of the issued and outstanding equity shares of the venture corporation and if none of the shareholders are associates or affiliated corporations of the venture corporation. R.S., c. 488, s. 12.
(3) Where there is a material change, the investment by a venture corporation shall remain an eligible investment and any proceeds of redemption or repayment of principal of an eligible investment, if invested in accordance with subsection (1) of Section 11, shall be deemed to be an eligible investment, notwithstanding any other provision of this Act, for a period of two years from the date when the material change came to the knowledge of the corporation. R.S., c. 488, s. 13.
14 No equity shares, and no option or right to acquire equity shares, of a small business or of a corporation that has ceased to be a small business or that cease to be an eligible investment shall be transferred or granted by a venture corporation without first granting to all holders of the equity shares, other than a venture corporation, the right to acquire the whole of those equity shares, or of that option or right, upon the same terms and conditions. R.S., c. 488, s. 14.
15 Within four months of the end of each of its fiscal periods, a venture corporation shall file with the Minister its audited financial statements and the auditor's report thereon. R.S., c. 488, s. 15.
16 (1) Within four months of the end of each of its fiscal periods, a venture corporation shall file with the Minister a return in the prescribed form setting out, as of the end of that fiscal period, the information required by the return.
17 The Minister may, at any time by notice, require any venture corporation or any corporation in which the venture corporation has invested to file within the time specified in the notice a return upon any subject connected with its affairs that, in the opinion of the Minister, is relevant to the administration or enforcement of this Act. R.S., c. 488, s. 17.
18 (1) Subject to subsection (2) and subsection (4) of Section 6, where a venture corporation complies with the provisions of this Act, the Minister may make an equity loan to the venture corporation under Section 19.
(2) Subject to Section 22, where the Minister is of the opinion that a venture corporation, its officers or directors, or its shareholders are conducting its or their business and affairs in a manner that is contrary to the spirit and intent of this Act or for the purpose of obtaining an equity loan to which they would not otherwise be entitled, the Minister may
(3) Where a venture corporation does not comply with the provisions of this Act or the regulations, but the Minister is of the opinion that the venture corporation is meeting the spirit and intent of this Act, the Minister may, for such time as in his opinion is appropriate, refrain from revoking the registration of the venture corporation. R.S., c. 488, s. 18.
19 (1) Subject to subsection (2), a venture corporation may make an application in the form prescribed by the Minister for an equity loan, and the Minister may make an equity loan to the venture corporation equal to the amount of the venture corporation's equity capital, or, as the case may be, any increase in its equity capital since an equity loan was last granted to it.
20 (1) An equity loan made to a venture corporation pursuant to Section 19 is a debt payable by the venture corporation to Her Majesty in right of the Province, the principal balance of which at any time shall be the original amount of that equity loan made to the venture corporation less all repayments on account of principal made thereon before that time.
(4) A venture corporation shall repay an equity loan that it has received by making payments to Her Majesty in right of the Province on account of interest and principal, as provided in subsection (6), until the principal balance of the equity loan is repaid in full, which payments shall not be less than
(iii) any loans, or other appropriation of funds or other property of the venture corporation, or any bonus or other payment that does not represent regular salary, made by it to or for the benefit of any of its shareholders or an associate of any of its shareholders,
(c) fifty per cent of any assets remaining after payment, or provision for payment, of all other creditors of the venture corporation, where the registration of the venture corporation under this Act is revoked or where the venture corporation commences to wind up or initiates steps to cause its dissolution or is declared bankrupt.
(a) accrue on an equity loan at a prescribed rate which shall not exceed by more than three percentage points the interest rate charged by the Bank of Canada to chartered banks at the beginning of the fiscal year of the Province for which the interest rate is being prescribed;
(6) Each payment made under subsection (4) on account of an equity loan shall apply first to the unpaid interest, if any, accrued on the unpaid principal balance of the equity loan to the date of payment and, to the extent of any excess, shall apply against the principal balance of the equity loan.
(8) The Minister may make regulations limiting the amount that may be paid by a venture corporation in respect of management compensation or any other expense incurred in a transaction that is not at arm's length.
(10) Any persons, whether or not they are shareholders of the venture corporation, who receive a payment, loan or appropriation referred to in clause (b) of subsection (4) knowing, or having reason to know, that the payment on account of principal and interest, if any, required to be made on the corporation's equity loan under subsection (4) and clause (b) of subsection (9) cannot, or will not, be made are jointly and severally liable, along with the venture corporation, to Her Majesty in right of the Province to the extent of any failure by the venture corporation, in whole or in part, to make that payment.
(11) If clause (a) or (b) of subsection (4) applies to more than one equity loan that has been granted to the venture corporation, the amounts required by those clauses to be repaid on account of principal on an equity loan shall be deemed to refer to all such equity loans, and the total amount to be repaid on account of interest and principal shall be allocated to each such equity loan in proportion to its principal balance then outstanding.
(12) A venture corporation may repay an equity loan, in whole or in part, at any time or times before repayment is required by this Section, with interest, if any is applicable, on the unpaid balance accrued to the time of payment. R.S., c. 488, s. 20.
21 (1) Where any amount is payable to Her Majesty in right of the Province or is deemed to be payable to Her Majesty under this Act, the Minister may, by notice of demand in writing to the person by whom the payment is owing or claimed to be owing, demand payment immediately or in the number of days specified in the demand, and if the payment is not made as demanded, the Minister may recover and collect the amount thereof by any of the remedies or procedures provided for in this Act.
(2) Notwithstanding that an objection or other proceeding under Section 22 has been commenced or may be commenced, every amount demanded to be paid under subsection (1) remains payable and recoverable until the demand therefor is revoked in writing by the Minister. R.S., c. 488, s. 21.
(2) If the Minister has not registered a corporation under Section 6 within two months of the date on which the corporation delivered a proposal under Section 4, the Minister shall be deemed to have refused registration under clause (a) of subsection (1).
(3) Where a person objects to a notice of intention under subsection (1) that is served on him, or where subsection (2) applies, he may within sixty days from the day of service of the notice of intention or the date upon which the Minister is deemed to have refused registration under subsection (2), serve on the Minister a notice of objection in duplicate in the prescribed form setting out the reasons for the objection and all relevant facts.
(5) Upon receipt of the notice of objection, the Minister shall, with all due dispatch, reconsider the matter objected to and confirm, vary or abandon his intention, and he shall thereupon notify the person making the objection of his action.
(7) A decision of the Minister under subsection (5) is final and is not subject to appeal except where the decision involves the interpretation of a provision of this Act or involves a question solely of law.
23 In any dispute over a decision or action of the Minister under this Act, the Minister may, where the dispute involves the interpretation of a provision of this Act, involves a question solely of law in which no facts are in dispute or involves the proper inference to be drawn from facts that are not in dispute, agree in writing with the disputing party as to the undisputed facts and thereafter apply to the Trial Division of the Supreme Court to have the issue in dispute determined, and if the Minister does not make the application within thirty days of the date upon which the undisputed facts have been agreed upon in writing, the other party to the dispute may apply to the Court to have the issue determined. R.S., c. 488, s. 23.
24 (1) Every person who makes or assists in making a statement in any document required by or for the purposes of this Act or the regulations that, at the time and in the light of the circumstances in which it was made, is false or misleading in respect of any material fact or that omits to state any material fact the omission of which makes the statement false or misleading is guilty of an offence and is liable on summary conviction to a penalty of not more than twenty thousand dollars.
(2) No person is guilty of an offence under subsection (1) if he 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. R.S., c. 488, s. 24.
25 (1) Section 90 and subsection (1) of Section 91 of the Income Tax Act are incorporated herein to the extent required by subsection (2) except that "Minister" referred to therein means the Minister under this Act and "Act" therein means this Act.
26 In addition to any other remedy available under this Act, where any person obtains an equity loan under this Act or the regulations on the basis of information that is false or misleading or an application that contains any false or misleading statement, the amount of that equity loan, together with interest thereon, if any, at the prescribed rate, shall be deemed to be a debt due to Her Majesty in right of the Province and may be recovered by an action in a court of competent jurisdiction. R.S., c. 488, s. 26.
(4) The exercise by the Governor in Council or the Minister of the authority in this Section or in subsection (8) of Section 20 shall be regulations within the meaning of the Regulations Act. R.S., c. 488, s. 27.
28 (1) The Governor in Council may appoint not less than three nor more than five persons to be members of a Venture Corporations Board for the purpose of advising and assisting the Minister concerning the administration of this Act.
29 The Venture Corporations Board shall have all the powers and duties that are necessary to carry out and effect such matters and things pertaining to this Act or the regulations as are conferred upon it by the Minister. R.S., c. 488, s. 29.
30 (1) The objects and purposes for which money may be provided under this Act shall be financial assistance within the meaning of the Nova Scotia Jobs Fund Act and payments made pursuant to this Act shall be made out of the Nova Scotia Jobs Fund as authorized from time to time by the Governor in Council.