Acts and Regulations

2003-39 - General

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Full text
Current to 1 January 2024
NEW BRUNSWICK
REGULATION 2003-39
under the
Small Business Investor Tax Credit Act
(O.C. 2003-220)
Filed July 29, 2003
Under section 48 of the Small Business Investor Tax Credit Act, the Lieutenant-Governor in Council makes the following Regulation:
2018-38
Citation
1This Regulation may be cited as the General Regulation - Small Business Investor Tax Credit Act.
Definition of “Act”
2In this Regulation, “Act” means the Small Business Investor Tax Credit Act. (Loi)
Application for registration
2012-47
2.1For the purposes of subsection 5(2) of the Act, the application fee is $100.
2012-47; 2018-38
Minimum amount of capital to be raised
3For the purposes of paragraph 6(2)(a) of the Act, the minimum amount of capital to be raised by a corporation registered under section 6 of the Act is $10,000.
2016-21; 2018-38
Wages and salaries
4(1)For the purposes of section 8 of the Act, a corporation registered under section 6 of the Act shall pay at least 75% of its wages and salaries to individuals who are residents of New Brunswick.
4(2)Despite subsection (1), if at least 50% of the total revenue of a corporation registered under section 6 of the Act is derived from the sale of its goods and services outside New Brunswick, the corporation shall pay at least 50% of its wages and salaries to individuals who are residents of New Brunswick.
2014-79; 2016-21; 2018-38
Private companies
2009-166
4.1For the purposes of paragraph 9(a) of the Act, a private company shall meet the following requirements:
(a) the company is exempt from filing a preliminary prospectus and prospectus under subsection 71(1) of the Securities Act in relation to a specified issue of eligible shares; and
(b) the company’s securities are not listed on an exchange as defined in subsection 1(1) of the Securities Act or quoted on a quotation and trade reporting system as defined in subsection 1(1) of the Securities Act.
2009-166; 2018-38
Calculation of total assets
5For the purposes of paragraph 9(e) of the Act, the total assets of a corporation registered under section 6 of the Act and its associated corporations shall be calculated by totalling the net book value of the tangible assets of the corporation and its associated corporations as contained in the financial statements attached to the corporation’s application for registration under section 5 of the Act.
2016-21; 2018-38
Minimum number of eligible investors
6For the purposes of paragraph 10(1)(d) of the Act, the minimum number of eligible investors is three.
2018-38
Minimum investment
7(1)For the purposes of subparagraph 10(1)(d)(iv) of the Act, the minimum amount to be invested by each eligible investor is $1,000.
7(2)Despite subsection (1), if an eligible investor is a corporation or a trust, the minimum amount to be invested by the eligible investor is $50,000.
2014-79; 2018-38
Redemption of eligible shares
8(1)For the purposes of paragraph 10(1)(f) of the Act, a corporation registered under section 6 of the Act may redeem an eligible share where it is held by a person who makes a written request to the corporation to redeem it and notifies the corporation in writing that
(a) the eligible share has devolved on the person on the consequence of the death of the original purchaser of the eligible share or the death of the annuitant under a registered retirement savings plan or registered retirement income fund that was the original purchaser of the eligible share, or
(b) the eligible share is held as an investment in a registered retirement savings plan or registered retirement income fund under which the original purchaser of the eligible share is the annuitant and the original purchaser has died.
8(2)No payment is required to be made under subsection 29(2) of the Act where an eligible share is redeemed in accordance with subsection (1).
2016-21; 2018-38
Transfer of eligible shares
9(1)For the purposes of paragraph 10(1)(g) of the Act, a corporation registered under section 6 of the Act may register a transfer of an eligible share where the corporation is notified in writing that the eligible share is being transferred
(a) to be held in a registered retirement savings plan or registered retirement income fund under which the original purchaser is the annuitant,
(b) from a registered retirement savings plan or registered retirement income fund to the annuitant where the annuitant is the original purchaser, or
(c) as a consequence of the death of the original purchaser.
9(2)No repayment is required to be made under section 31 of the Act where an eligible share is transferred in accordance with subsection (1).
2016-21; 2018-38
Community economic development plan
2016-21
9.1For the purposes of paragraph 13(1)(c) of the Act, a community economic development plan of a corporation or cooperative applying for registration under section 13 of the Act shall contain or make provision for the following:
(a) a mission statement outlining the economic development strategy of the corporation or cooperative and the defined community it intends to serve;
(b) the amount of capital to be raised under the plan;
(c) the proposed use of the funds raised under the plan;
(d) with respect to eligible investors who have agreed to purchase eligible shares of the specified issue, whether directly or through a qualifying trust,
(i) for each eligible investor who is an individual, the full name, social insurance number and residential address of the eligible investor;
(ii) for each eligible investor that is a corporation, the name, business number and head office address of the eligible investor;
(iii) for each eligible investor that is a trust, the name, account number and residential address of the eligible investor;
(iv) the number of shares subscribed for and the amount to be paid by each eligible investor;
(v) the number of shares of the corporation or cooperative held at any time by each eligible investor, and
(vi) a statement signed by each eligible investor certifying that the information in subparagraphs (i) to (v) with respect to the eligible investor is accurate;
(e) a summary of the major business activities and the major revenue sources of the corporation or cooperative; and
(f) the names in full of the directors and officers of the corporation or cooperative and their addresses and background information.
2016-21; 2018-38; 2019, c.24, s.196
Conditions for registration of a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.2For the purposes of subparagraph 14(1)(a)(v) of the Act, a corporation or cooperative registered under section 14 of the Act shall meet the following conditions:
(a) that shares to be issued as part of a specified issue under the plan
(i) are eligible shares as defined under section 1 of the Act and have never been previously issued,
(ii) will only be issued by the corporation or cooperative on being fully paid for, and
(iii) will, immediately following their issue, be registered in the name of each shareholder that purchases them or in the name of a trustee, if the shares are held by the trustee for the benefit of a shareholder;
(b) an investment confirmation is issued to each eligible investor who invests in the corporation or cooperative within 30 days after the investment has been made, setting out the proposed use of the capital to be raised by the specified issue and a summary of the major business activities and revenue sources of the corporation or cooperative;
(c) it is prohibited from redeeming an eligible share in respect of which a tax credit certificate is issued under the Act unless the redemption occurs more than four years after the date on which the eligible share was issued, or the redemption occurs in the circumstances and meets the conditions prescribed under subsection 8(1);
(d) it is prohibited from registering a transfer by the original purchaser or a registered retirement income fund under which the original purchaser or the original purchaser’s spouse is the annuitant, of an eligible share in respect of which a tax credit certificate has been issued under the Act unless the transfer occurs more than four years after the date on which the eligible share was issued, or the transfer occurs in the circumstances and meets the conditions prescribed under subsection 8(1);
(e) it is prohibited from lending money, guaranteeing a loan or providing other financial assistance to any person for the purpose of or in connection with a purchase of eligible shares that are part of a specified issue;
(f) the amount to be paid by each eligible investor shall not be less than $1,000 and, if the eligible investor is a trust or a corporation, the amount shall not be less than $50,000; and
(g) it shall have no fewer than three eligible investors who have agreed to purchase eligible shares of the specified issue.
2016-21; 2018-38; 2019, c.24, s.196
Fee for application for registration for a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.3For the purposes of subsection 13(2) of the Act, the application fee is $100.
2016-21; 2018-38
Minimum and maximum amount of capital to be raised by a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.4For the purposes of paragraph 14(2)(a) of the Act, the minimum amount of capital to be raised by a corporation or cooperative registered under section 14 of the Act is $10,000 and the maximum amount of capital to be raised within a 12-month period is $3,000,000.
2016-21; 2018-38; 2019, c.24, s.196
Wages and salaries of a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.5(1)For the purposes of section 16 of the Act, a corporation or cooperative registered under section 14 of the Act shall pay at least 75% of its wages and salaries to individuals who are residents of New Brunswick.
9.5(2)Despite subsection (1), if at least 50% of a corporation or cooperative’s total revenue is derived from the sale of its goods and services outside New Brunswick, the corporation or cooperative shall pay at least 50% of its wages and salaries to individuals who are residents of New Brunswick.
2016-21; 2018-38; 2019, c.24, s.196
Calculation of total assets of a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.6For the purposes of paragraph 17(f) of the Act, the total assets of a corporation or cooperative registered under section 14 of the Act and its associated corporations or cooperatives shall be calculated by totalling the net book value of the tangible assets of the corporation or cooperative and its associated corporations or cooperatives as contained in the financial statements attached to the corporation’s or cooperative’s application for registration under section 13 of the Act.
2016-21; 2018-38; 2019, c.24, s.196
Criteria for eligibility of a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.7For the purposes of paragraph 17(i) of the Act, a corporation or cooperative registered under section 14 of the Act shall meet the following criteria:
(a) a corporation or cooperative shall comply with any rule or decision respecting community economic development corporations or cooperatives made under the Securities Act in relation to a specified issue of eligible shares;
(b) a corporation’s or cooperative’s securities are not listed on an exchange as defined in subsection 1(1) of the Securities Act or quoted on a quotation and trade reporting system as defined in subsection 1(1) of the Securities Act;
(c) Repealed:  2019, c.24, s.196
(d) in the case of an cooperative, all or substantially all of the fair market value of the assets of the cooperative is attributable to
(i) assets used in an active business, or
(ii) shares of a corporation where all or substantially all of the fair market value of the assets of that corporation is attributable to assets of that corporation used in an active business or that the corporation has a constitution that restricts the corporation from operating or carrying on business that is an active business or to evaluating and making investments in one or more active businesses based on a set of criteria defined by the corporation.
2016-21; 2018-38; 2019, c.24, s.196
Investment requirements
2016-21
9.8For the purposes of subsection 18(1) of the Act, a corporation or cooperative registered under section 14 of the Act shall
(a) invest at least 40% of the capital raised in the first 12 months of the closing date of a specified issue,
(b) invest at least 60% of the capital raised in the first 24 months of the closing date of a specified issue,
(c) invest at least 80% of the capital raised in the first 36 months of the closing date of a specified issue, and
(d) restrict the capital raised by a specified issue for administration purposes to 20% or less of the capital raised.
2016-21; 2018-38; 2019, c.24, s.196
Penalty that may be imposed on a corporation or cooperative registered under section 14 of the Act
2016-21; 2018-38; 2019, c.24, s.196
9.9For the purposes of subsection 18(3) of the Act, the amount of the penalty that may be imposed on a corporation or cooperative registered under section 14 of the Act for failing to meet the investment requirements referred to in section 9.8 shall be an amount equal to 1/6 of the amount of the shortfall.
2016-21; 2018-38; 2019, c.24, s.196
Application for tax credit certificate
10(1)An application for a tax credit certificate under subsection 20(1) or (2) of the Act shall be made within 30 days after the eligible investor has paid for an eligible share issued by the corporation.
10(2)An application for a tax credit certificate under subsection 20(1) or (2) of the Act shall be accompanied by a copy of the share certificate or certificates issued to the eligible investor in respect of the eligible shares purchased by the eligible investor.
10(3)For the purposes of subsection 20(3) of the Act, the application fee is $25.
2012-47; 2014-79; 2018-38
Interest
11(1)For the purposes of paragraph 31(a) and section 36 of the Act, the rate of interest is the rate set out in subsection 9(1) of the General Regulation – Revenue Administration Act.
11(2)When an amount is owing under paragraph 31(a) of the Act, interest accrues on that amount commencing on the date of the disposition of the eligible share.
2018-38
Annual return
12For the purposes of subsection 32(1) of the Act, a corporation registered under the Act shall file an annual return within 90 days after the end of its fiscal year.
2014-79; 2018-38
Commencement
13This Regulation comes into force on August 1, 2003.
N.B. This Regulation is consolidated to January 1, 2020.