The laboursponsored venture capital corporations act. Unofficial consolidation for financial years beginning. Laboursponsored venture capital corporation wikipedia. In order for their shareholders to qualify for this credit, these corporations must be federally, provincially or territorially approved. Experts urge caution over laboursponsored funds the globe. Short title 1 this act may be cited as the labour sponsored. Register of laboursponsored venture capital corporations. Back to the act bilingual pdf capital corporations act part 1 interpretation. For purposes of the nb tax credit, eligible lsvc corporations are required to be prescribed in the new brunswick regulation 200111 under the new brunswick income tax act. Budget 20 labour sponsored venture capital corporations. Changes to labour sponsored investment funds a work in. These corporations give individual investors a unique opportunity to support small and mediumsized enterprises in canada.
Tax credits labour sponsored venture capital tax credit. A tax expenditure analysis of laboursponsored venture capital. Laboursponsored investment funds explained mutual funds. Laboursponsored venture capital corporations regulation. Labour sponsored investment funds lsifs are corporations sponsored by labour organizations designed to invest in small and midsize canadian businesses subject to the following criterion. The principal programmes are laboursponsored venture capital companies cumming and macintosh 2003. Comments by the quebec employers council department of. A labour sponsored venture capital corporation lsvcc, known alternately as labour sponsored investment fund lsif or simply retail venture capital rvc, is a fund managed by investment professionals that invests in small to midsized canadian companies. A laboursponsored venture capital corporation lsvcc, known alternately as labour sponsored investment fund lsif or simply retail venture capital rvc, is a fund managed by investment professionals that invests in small to midsized canadian companies. Chapter 488 of the revised statutes, 1989 amended 2000, c. Under canadas income tax act and saskatchewans laboursponsored venture capital corporation lsvcc act, investors are eligible to receive a 15% federal tax credit and a 17. Changes to the act will ensure the longterm sustainability and success of these funds, while ensuring the government of saskatchewan can meet the challenge of reduced resource revenues.
The laboursponsored venture capital corporations amendment. Laboursponsored venture funds financial definition. Aug 29, 2016 labour sponsored venture capital corporations tend to be corporations tied to labour unions. Lsvccs have been fixtures on the canadian investment fund landscape for over 30 years. In this paper, we examine a canadian taxdriven vehicle known as the labour sponsored venture capital corporation lsvcc. Industry canada, labour sponsored venture capital corporations. Labour sponsored venture capital tax credit this tax credit is designed to assist small and mediumsized nova scotia businesses and cooperatives in obtaining equity financing by offering a personal income tax credit to individuals investing in registered labour sponsored venture capital corporations lsvccs. Laboursponsored venture capital corporation in canada. Proposed national instrument 81106 investment fund. As a theoretical matter, we suggest that the lsvccs can be expected to have higher agency costs and lower profitability than private venture capital funds. A laboursponsored venture capital corporation lsvcc, known alternately as laboursponsored investment fund lsif or simply retail venture capital rvc, is a fund managed by investment professionals that invests in small to midsized canadian companies. Plldlddbpmbills1st session 28th legislature 20162017bill62. Laboursponsored venture capital corporation funds tax. Previously announced amendments to laboursponsored.
Laboursponsored venture capital corporations tax credit reintroduced. The penalty payable by a labour sponsored venture capital corporation under subsection 9. Pursuant to the saskatchewan act, subscriber shares may be purchased by individuals and transferred to trusts governed by rrsps or rrifs, or subscriber shares may be purchased directly by an individuals rrsp. Experts urge caution over laboursponsored funds the. Budget 2016 confirmed the governments intention to re establish the federal tax credit for investments in certain labour sponsored venture capital corporations lsvccs. An act to amend the labour sponsored venture capital corporations act assented to march 12, 2014 her majesty, by and with the advice and consent of the legislative assembly of saskatchewan, enacts as follows. Labour sponsored venture capital corporations are a decade old canadian phenomenon which now account for more than onethird of all institutional venture capital in that country. If you need an official copy, use the bilingual pdf version. Summary of budget 2019 changes to the small business venture. The establishment of the federal lsvcc tax credit motivated provinces other than quebec to. This information is intended to introduce you to the program and is not intended as a substitute for the laboursponsored venture capital corporations act or the laboursponsored venture capital corporations regulations.
Province introduces changes to the laboursponsored venture. Penalty tax where venture capital business discontinued 204. The laboursponsored funds tax credit 2020 turbotax. Register of labour sponsored venture capital corporations. Mutual funds that do not charge an upfront or backend commission, but instead take out.
The laboursponsored venture capital corporations act, ss. The amendments are intended to modernize the small business venture capital tax credit program and bring the program up to date with current investment practices and business operations of venture capital backed technologybased startups. The small business venture capital program offers tax credits to investors to encourage them to make equity capital investments in b. Today the government of saskatchewan introduced the labour sponsored venture capital corporations amendment act, 2017. Summary of budget 2019 changes to the small business. They function as other venture capital corporations but are subject to government regulation. The principal programmes are labour sponsored venture capital companies cumming and macintosh 2003. The laboursponsored venture capital corporations regulations. Application of nwpta to certain measures relating to venture capital corporations 2. Federal tax credit sparks renewed interest in labour. Province introduces changes to the laboursponsored. The laboursponsored funds tax credit 2020 turbotax canada.
Wolfgang stummer and the seminar participants at the canadian law and. An lsvcc is a venture capital corporation established under enabling legislation federal or provincial and sponsored by a labour organization. Labour sponsored investment funds explained the federal and provincial governments introduced lsifs in the 1980s to promote economic growth by encouraging canadians to invest invest to use money for the purpose of making more money by making an investment. Budget 20 labour sponsored venture capital corporations lsvcc tax credit we have archived this page and will not be updating it. Frontier had indicated to the commission staff that it wished to establish a type b corporation pursuant to the provisions of the labour sponsored venture capital corporations act s. Ayayi 2004, the public venture capital fund innovatech and several tax incentive programmes. The roi fund intends to apply for registration as a registered laboursponsored venture capital. Laboursponsored venturecapital tax credit this tax credit is designed to assist small and mediumsized nova scotia businesses and cooperatives in obtaining equity financing by offering a personal income tax credit to individuals investing in registered labour. Laboursponsored venture capital corporations tax credits and. An act respecting laboursponsored venture capital corporations short title 1 this act may be cited as the laboursponsored venture capital corporations act. The amendments amend the laboursponsored venture capital corporations act, s. Laboursponsored venturecapital tax credit nova scotia.
Jun 03, 2005 labour sponsored or venture capital fund means an investment fund that is a a labour sponsored investment fund corporation or a labour sponsored venture capital corporation under provincial legislation, b a registered or prescribed labour sponsored venture capital corporation as defined in the ita, c an evcc, or d a vcc. Short title 1 this act may be cited as the labour sponsored venture capital corporations amendment act, 2014. Aiken labour sponsored investment funds lsifs are venture capital corporations, sponsored by a trade union or other qualified employee organization, that are designed to provide alternative sources of capital to small and mediumsized businesses in ontario. There are many challenges to owning a small business among them, raising capital. For additional information, see tax credits labour sponsored venture capital tax credit in related links. This information is intended to introduce you to the program and is not intended as a substitute for the labour sponsored venture capital corporations act or the labour sponsored venture capital corporations regulations. Canadian labour sponsored venture capital corporations. Lsvccs have been fixtures on the canadian investment fund. The roi fund intends to apply for registration as a registered labour sponsored venture capital.
The canadian federal government and some provincial governments offer tax credits to lsvcc investors to promote the growth of such companies. Today the government of saskatchewan introduced the laboursponsored venture capital corporations amendment act, 2017 changes to the act will ensure the longterm sustainability and success of these funds, while ensuring the government of saskatchewan. Lines 40 and 41400 laboursponsored funds tax credit. Canadian laboursponsored venture capital corporations. Budget 2016 confirmed the governments intention to reestablish the federal tax credit for investments in certain labour sponsored venture capital corporations lsvccs. Canada business corporations act justice laws website. Apr 08, 2019 labor sponsored venture capital corporations lsvcc. Today the government of saskatchewan introduced the laboursponsored venture capital corporations amendment act, 2017. The existing investment requirements of the laboursponsored venture capital corporations act manitoba, the laboursponsored venture capital corporations act saskatchewan and small business venture capital act british columbia fall within the scope of. Labour sponsored funds mutual funds td direct investing. Mar 24, 2016 labour sponsored funds or labour sponsored venture capital corporations were introduced in the 1980s as a way for small investors to invest in small to mediumsized businesses. A type of canadian corporation created by a labor union that deals exclusively with providing venture capital. This chapter is part of our broader research project on canadian laboursponsored venture capital corporations sponsored by the schulich school of business national research program in financial services and public policy. Dec 01, 2016 labour sponsored venture capital corporations are designed by labour unions in canada to provide venture capital to upandcoming enterprises.
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