Help with Forms - September

Name of Investor: Normally, the investor is the person or entity who is actually making the transaction directly, however, in some cases it may be permissible for the parent company of a wholly-owned subsidiary making the transaction to be listed as the investor (e.g. where the subsidiary is not yet formed). It must, in all cases, be a legal person or entity as defined under the Act.

If you incorporate a company to effect an acquisition, it is not necessary to file to establish the new business—it is the acquisition part which is notifiable, and the investor usually would be the newly-incorporated company. However, in these circumstances, you have the option of making its parent the Investor.

In addition, if you are establishing a new business, you have the option of making the new business the investor to establish itself or you can have its parent as the investor.

Investor’s board of directors (or similar governing body): The members of the investor’s board of directors, or the similar governing body if not a corporation (e.g. trustees, managing partners) refers to the individuals who act in the role of directors, whether they are formally appointed as such or not. It does not include entities. A director’s role is to manage, or supervise the management of, the business and affairs of a corporation. If a parent or associated company acts as director of the investor, the investor’s board of directors would include the members of that other company’s board.

Local mailing address is an address:

  • That is different from the business address;
  • That has a physical or personal connection to the individual (in other words it should be local to the individual);
  • In which the individual can receive mail; and
  • Which is not a law firm.

A Canadian address is acceptable if the individual resides or works at the location provided. The only instance in which the business address and local mailing address may be identical is when the individual’s place of residence is also used as their place of business.

Where an investor is acting on behalf of someone else, that other person or entity should be used to determine the ultimate controller of the investor.

Ultimate controller of the investor is the highest level of controlling shareholder or group of shareholders of the investor. If the ultimate controller is publicly listed and widely held whereby no shareholder controls, it is controlled by its Board of Directors, if a company. A statement to that effect is required. The same would apply to the question of who controls the vendor.

Describe relationship:With respect to the manner in which control is exercised, describe relationship can include but is not limited to, for example:

  • The investor is a wholly owned subsidiary of Company A (the ultimate controller);
  • Company A (the ultimate controller) holds 60% voting shares in the investor; or
  • Control of the investor is exercised through and by the Board

By WTO Investor, is an investor whose ultimate controller’s country of origin is a WTO member country, excluding those with only observer status. WTO: Members and Observers

By Trade Agreement Investor, is an investor whose ultimate controller’s country of origin is one that is listed in the Schedule to the Investment Canada Act.

By country of "origin", the country of ultimate control is indirectly implied. If the ultimate controller is controlled by its board of directors (or similar governing body) and their country of origins are diverse (i.e. less than two-thirds from any one country), provide the countries of origin for each board member.

"Persons employed" (and not "employees"): How many "persons" are utilized to carry on the activity of the Canadian business being acquired. This would include Directors, part-time, or contracted out persons (including companies). The question is not restricted to the legal definition of the word "employee" and the answer cannot be 0 unless the business is shut down or consists of proven unexploited natural resources.

What are the total assets shown on the balance sheet of the Canadian business at the end of the last completed fiscal year before its acquisition? If the financials are not yet prepared, an approximate amount which is computer generated is acceptable. If you require additional information because of your particular situation, you may contact us at Innovation, Science and Economic Development Canada, Investment Review Division by fax at 343-291-2469, or by email at: Investment Canada

Indirect acquisition: An indirect acquisition is a transaction involving the acquisition of the SHARES of a company incorporated OUTSIDE of Canada, which owns subsidiaries in Canada. An asset transaction where the vendor is the Canadian business in Canada is considered a direct acquisition.

Acquisition in whole or in part: Paragraph 25.1(c) refers to an acquisition of an entity, in whole or in part, which could include equity interests (e.g. shares, partnership interests, participation rights) or tangible or intangible assets used in carrying on operations in Canada (e.g. intellectual property, real property). Note that it would not include the purchase and sale of inventory in the ordinary course of business.

Indicate the reasons for your INABILITY to answer any of the questions. An attempt must have been made to obtain the information. We reserve the right to determine whether the investor was UNABLE to answer the questions.