Are You Contemplating Raising Funds While Also Remaining Private?

Are you contemplating raising funds and remaining "private" without having to file documents with the Autorité des marchés financiers (AMF)? This article will endeavour to guide issuers with respect to the Securities Act (Québec) requirements that apply in this context.

Under the provisions of the Securities Act, every person intending to make a distribution of securities shall prepare a prospectus, unless an exemption is available. Regulation 45-106 respecting Prospectus and Registration Exemptions provides that the obligation to prepare a prospectus does not apply to the distribution of a security by a "private issuer" to a person belonging to a prescribed class who purchases the security as principal. A private issuer does not have to file any document or distribution report with the AMF, nor does it have to pay any fee pursuant to the Act when it raises funds.