Hi all, Wondering if anyone has dealt with a similar situation. I have a small tech startup client that attracted investors and raised $600k selling shares shares at $10 each. That part is straight forward. At the same time they issued more of the same class of shares to individuals and companies …

Interesting. Not sure there is anything offside at all from a tax perspective, and maybe, or maybe not from the original investors’ (“OIs”) perspective. From the perspective of an OI, if the new investors (“NIs”) performed work and took discounted shares in exchange, the OIs are getting a (potentia…

If the employees had forgone their rights for salary in the first place, and decided to work for nothing, without any expectation of being paid, then that should the end to the topic, but if all the sudden, the company decided to compensate them, that becomes a series of transactions, and we maybe…

Ever heard of ‘benefit conferred on a shareholder’?

Yep. Given that this is a (self-described) “startup”, a “benefit” probably doesn’t exist and there is an interesting legal question as to whether a benefit CAN being conferred on someone by providing an artifically low purchase price on shares…especially when there is no existential proof of an exch…

Well, the cash paid by the investors, becomes property of the company, and diluting the shares, essentially sharing the cash with all other shareholders already, that’s something that can be measured based on % of shares

" (especially in a private company where the Sec Comm is unlikely to be involved)." . . Oh my. @SmallBizGuy - I think you are greatly under-estimating the incredibly broad scope, and incredibly deep depth that the BCSC reaches into… I know I was extremely surprised at how broadly they define an…

Well that would be spice on the rice!! Messy situations like this are often fun NOT to be involved in, but to have lotsa popcorn nearby for…

@SmallBizGuy “but to have lotsa popcorn nearby for…” … and increased practice insurance coverage limits…

[image] RRAccounting: that’s something that can be measured based on % of shares Are you saying that would be a benefit conferred on a shareholder??? I can’t agree with that. If I buy shares in a private company, those shares have no active trading value. Even if there was a legitimate val…

Income Tax Audit Manual Chapter 24 - Canada.ca The Income Tax Audit Manual (ITAM) is published by the Compliance Programs branch of the CRA. It contains procedures and policies related to audits of small and medium businesses. It is used by CRA employees as a guide and a reference in th…

Shares issued for a nominal amount

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Shares issued for a nominal amount

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