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S-29.1 - Act respecting Québec business investment companies

Section 12
Disposition versions

Full text
12. An investment validated by the body designated under section 1 which is made before 13 June 2003 by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights, held by natural persons, is not less than $50,000, and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $50,000,000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 12 months following the acquisition, more than 50% of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of the body designated under section 1 where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299; 2000, c. 39, s. 278; 2001, c. 51, s. 254; 2002, c. 40, s. 337; 2006, c. 13, s. 236; 2010, c. 37, s. 129.
12. An investment validated by Investissement Québec which is made before 13 June 2003 by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights, held by natural persons, is not less than $50,000, and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $50,000,000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 12 months following the acquisition, more than 50% of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299; 2000, c. 39, s. 278; 2001, c. 51, s. 254; 2002, c. 40, s. 337; 2006, c. 13, s. 236.
12. An investment validated by Investissement-Québec which is made by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights, held by natural persons, is not less than $50,000 and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $50,000,000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 12 months following the acquisition, more than 50 % of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299; 2000, c. 39, s. 278; 2001, c. 51, s. 254; 2002, c. 40, s. 337.
12. An investment validated by Investissement-Québec which is made by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights, held by natural persons, is not less than $50,000 and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private legal person within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25,000,000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 12 months following the acquisition, more than 50 % of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299; 2000, c. 39, s. 278; 2001, c. 51, s. 254.
12. An investment validated by Investissement-Québec which is made by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights, held by natural persons, is not less than $50,000 and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private legal person within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 12 months following the acquisition, more than 50 % of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299; 2000, c. 39, s. 278.
12. An investment validated by the Société de développement industriel du Québec which is made by a company whose paid-up capital in respect of its issued and outstanding common shares with full voting rights is not less than $50,000 and which is a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser, is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private legal person within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, and in the 24 months following the acquisition, more than 75% of the salaries paid to its employees and, as the case may be, to employees of the legal persons with which it is associated, to employees who, for the purposes of the regulations made under section 771 of the Taxation Act, are employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305; 1999, c. 83, s. 299.
12. An investment validated by Investissement-Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified legal person that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified legal person or of a subsidiary referred to in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified legal person,
(3)  (subparagraph repealed);
(4)  (subparagraph repealed);
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified legal person is not a qualified investment if the shareholder directly or indirectly controlling the qualified legal person that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified legal person any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the legal person shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a legal person that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of legal persons with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement-Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the legal person.
The conditions referred to in subparagraph 4 of the third paragraph and in paragraph 2 of section 12.3 must be met by a legal person during the 24 months following the acquisition of a qualified investment.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64; 1999, c. 40, s. 305.
12. An investment validated by Investissement-Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
(3)  (subparagraph repealed);
(4)  (subparagraph repealed);
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the corporation shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of Investissement-Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the corporation.
The conditions referred to in subparagraph 4 of the third paragraph and in paragraph 2 of section 12.3 must be met by a corporation during the 24 months following the acquisition of a qualified investment.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326; 1998, c. 17, s. 64.
12. An investment validated by the Société de développement industriel du Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
(3)  (subparagraph repealed);
(4)  (subparagraph repealed);
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the corporation shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of the Société de développement industriel du Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the corporation.
The conditions referred to in subparagraph 4 of the third paragraph and in paragraph 2 of section 12.3 must be met by a corporation during the 24 months following the acquisition of a qualified investment.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4; 1997, c. 14, s. 326.
12. An investment validated by the Société de développement industriel du Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
(3)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser, following the conversion of a convertible security of a qualified corporation that is acquired by a company as first purchaser after 16 May 1989, to the extent that such a conversion is made within 60 months from the date on which the convertible security was issued and on the conditions determined by regulation of the Government,
(4)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser, following the conversion of a convertible security of a qualified corporation that is acquired by a company as first purchaser after 16 May 1989, to the extent that such a conversion is made within 60 months from the date on which the convertible security was issued and on the conditions determined by regulation of the Government, and provided that each shareholder of the company holds, directly, indirectly or with related persons who are not employed by the qualified corporation or by a subsidiary mentioned in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the corporation shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of the Société de développement industriel du Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the corporation.
The conditions referred to in subparagraph 4 of the third paragraph and in paragraph 2 of section 12.3 must be met by a corporation during the 24 months following the acquisition of a qualified investment.
In the case of a qualified investment referred to in subparagraphs 3 and 4 of the first paragraph, the conditions referred to in subparagraph 2 of the third paragraph must be met by a qualified corporation on the date of issue of the convertible security rather than on the date of conversion of the convertible security.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8; 1991, c. 17, s. 4.
12. An investment validated by the Société de développement industriel du Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
(3)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser, following the conversion of a convertible security of a qualified corporation that is acquired by a company as first purchaser after 16 May 1989, to the extent that such a conversion is made within 60 months from the date on which the convertible security was issued and on the conditions determined by regulation of the Government,
(4)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser, following the conversion of a convertible security of a qualified corporation that is acquired by a company as first purchaser after 16 May 1989, to the extent that such a conversion is made within 60 months from the date on which the convertible security was issued and on the conditions determined by regulation of the Government, and provided that each shareholder of the company holds, directly, indirectly or with related persons who are not employed by the qualified corporation or by a subsidiary mentioned in section 15.2 or 15.2.1, less than 5 % of the voting shares of the share capital of the qualified corporation,
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
To be qualified, the corporation shall, at the time of acquisition, meet the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following 24 months, except with the prior authorization of the Société de développement industriel du Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the corporation.
The conditions referred to in subparagraph 4 of the third paragraph and in paragraph 2 of section 12.3 must be met by a corporation during the 24 months following the acquisition of a qualified investment.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8; 1989, c. 72, s. 8.
12. An investment validated by the Société de développement industriel du Québec which is,
(1)  in the case of a company referred to in section 4 or 4.2, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1 or 4.3, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2, less than 5 % of the voting shares of the share capital of the qualified corporation,
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
Where an investment is made in a corporation by a company registered under section 4 or 4.1 which is not a company registered under section 4.2 or 4.3, the corporation shall, to be qualified, meet, at the time of the acquisition, the following conditions:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following two years, except with the authorization of the Société de développement industriel du Québec where it is not dealing at arm’s length with the company following a transaction that is subsequent to the date on which a qualified investment is made and that may prevent the bankruptcy of the corporation.
Where an investment is made in a corporation by a company referred to in section 4.2 or 4.3, the corporation shall, to be qualified,
(1)  meet, at the time of the acquisition, the conditions provided in subparagraphs 1 to 6 of the third paragraph;
(2)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75 % of the salaries of its employees within the meaning of section 771 of the Taxation Act, to employees of an establishment situated in a designated region.
The conditions referred to in subparagraph 4 of the third paragraph and subparagraph 2 of the fourth paragraph must be met by a corporation during the two years following the acquisition of a qualified investment.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5; 1988, c. 80, s. 8.
12. An investment validated by the Société de développement industriel du Québec which is,
(1)  in the case of a company referred to in section 4, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser,
(2)  in the case of a company referred to in section 4.1, a common share with full voting rights of the share capital of a qualified corporation that is acquired by a company as first purchaser provided each shareholder of the company holds, directly, indirectly or with related persons who are not in the employ of the qualified corporation or of a subsidiary referred to in section 15.2, less than 5% of the voting shares of the share capital of the qualified corporation,
is a qualified investment.
Notwithstanding the first paragraph, an investment in a qualified corporation is not a qualified investment if the shareholder directly or indirectly controlling the qualified corporation that, but for this paragraph, would benefit by a qualified investment or a person with whom the shareholder is not dealing at arm’s length, is the shareholder of a company that, within the two years preceding the investment, made a qualified investment in a qualified corporation any of whose shareholders directly or indirectly controlling it or any person with whom the shareholder is not dealing at arm’s length is also a shareholder of the company that, but for this paragraph, would have made a qualified investment.
A corporation shall, to be qualified, meet the following conditions at the time of its acquisition:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last 12 months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than 12 months, more than 75% of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following two years, except with the authorization of the Société de développement industriel du Québec where the acquisition of other shares may prevent the bankruptcy of the corporation.
The condition referred to in subparagraph 4 must be fulfilled within two years following the acquisition of a qualified investment by a qualified corporation.
1985, c. 9, s. 12; 1986, c. 15, s. 228; 1986, c. 113, s. 5.
12. A common share with full voting rights of the share capital of a qualified corporation acquired by a company as first purchaser is a qualified investment.
A corporation shall, to be qualified, meet the following conditions at the time of its acquisition:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets of less than $25 000 000 or a net shareholders’ equity not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last twelve months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than twelve months, more than 75% of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate mainly in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following two years, except with the authorization of the Société de développement industriel du Québec where the acquisition of other shares may prevent the bankruptcy of the corporation.
1985, c. 9, s. 12; 1986, c. 15, s. 228.
12. A common share with full voting rights of the share capital of a qualified corporation acquired by a company as first purchaser is a qualified investment.
A corporation shall, to be qualified, meet the following conditions at the end of its last fiscal year:
(1)  be a Canadian-controlled private corporation within the meaning of section 1 of the Taxation Act (chapter I-3);
(2)  have assets, including those of corporations associated with it, of less than $25 000 000 or a net shareholders’ equity, including that of the shareholders of corporations associated with it, not in excess of $10 000 000;
(3)  have its head office in Québec;
(4)  have paid, in the last twelve months preceding the date of acquisition, or in the months preceding that date in the case of a corporation that has been in operation for less than twelve months, more than 75% of the salaries paid to its employees within the meaning of section 771 of the Taxation Act and, as the case may be, to employees of corporations with which it is associated, to employees of an establishment situated in Québec;
(5)  operate in one of the sectors of activity determined by regulation of the Government;
(6)  deal at arm’s length with the company, within the meaning of the regulations, on that date and in the following two years, except with the authorization of the Société de développement industriel du Québec where the acquisition of other shares may prevent the bankruptcy of the corporation.
1985, c. 9, s. 12.
© Gouvernement du Québec