Canadian Lawyer InHouse

Oct/Nov 2010

Legal news and trends for Canadian in-house counsel and c-suite executives

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By Wayne Egan, partner, and Ian Mitchell, associate, WeirFoulds LLP Get in the game Do you know what it takes to get your team up and running and over the initial hurdle of startup? Wayne Egan and Ian Mitchell help you find out by testing your knowledge with this simple quiz. Ted and William have decided to establish a new hockey club in Toronto, on an amateur basis but with the hope that it will be ready when the NHL decides to add a second professional team in Toronto. In order to get the hockey club underway, Ted and William need to raise some money and have a few questions about that process. Ted and William have approached a number of their friends who are interested in amateur hockey to put money into the new club. They have been advised that they can only raise the money from accredited investors. After raising the initial round of funds, Ted and William need more money to expand the club, and have been approached by Anna with a proposal to find investors for their hockey club. They enter into an agreement with Anna, and are told by her that she does not need to be registered in Ontario as a dealer to raise money on behalf of the hockey club. Once Ted and William find out the situation regarding Anna, they determine that they are going to proceed on their own to raise further funds for the hockey club. However, the hockey club at this point has flourished and is well on its way to making money. As a result, they offer the new investors the opportunity to share in future profits of the hockey club. What exemptions are available to Ted and William to raise further funds for the hockey club? Ted and William have determined to build condominiums in the area surrounding the hockey club's rink. They decide to sell interests in the company that is building the condominiums, and have been advised that since the condominium is involved in real estate, the Securities Act (Ontario) does not apply. Ted and William proceed to sell shares in the new company which is developing the condominium building. They are able to sell those shares on the following basis: INHOUSE OCTOBER 2010 • 15 2 3 e) T d) d) under All c) Thr Thr of the a any the act b) Thr ough a) ough above 5 ough b) rue False a) T 4 transaction employees Not-for c) o b) a) Private edited employees Minimum Accr -pr ofit of $150,000 issuer the issuer investor of hockey cash club chase pur of a individual the of that is that security b) rue False a) T b) rue False a) T 1 in is r condominium exempt ed fr to egister om one transaction the sell r company egistration securities r equir the under ements act

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