Securities Law

LPS 3-34 - Application for Non-Reporting Status [Rescinded]

Published Date: 1987-01-16
Effective Date: 1987-02-01
Rescinded Date: 2000-12-19

1.0        IMPLEMENTATION

1.1        This Local Policy Statement has been revised solely to conform with the Securities Act S.B.C. 1985 c.83 and the Regulations thereto.  Other than consequential amendments, there have been no changes of a substantive nature to this policy.  It becomes effective upon proclamation of the Act on February 1, 1987.

2.0        DEFINITION

2.1        The Company Act Section 1(l) provides that a "reporting company" may be designated by the Registrar of Companies to be not a reporting company.  As well, Section 72 of the Act provides that a  reporting issuer" may be deemed by the Commission to have ceased to be a reporting issuer.  Therefore, a reporting company/issuer seeking non-reporting status must apply to the Registrar of Companies if it falls within the Company Act definition of 'reporting company" and/or to the Commission if it falls within the Act definition of "reporting issuer".

3.0        GENERAL REQUIREMENTS

As policy guideline, the following is the general requirement pertaining to an application by an issuer applying for the Commission's order for designation as a non-reporting issuer.

3.1        As a general rule, an order conferring non-reporting status will be granted only where close corporation concepts are demonstrated by the applicant issuer.

3.2        The following matters may be taken into consideration in determining such concepts:

3.2.1     Both debt and equity securities of the applicant issuer are held by relatively few holders.

3.2.2     The management and ownership are substantially identical or there exists a community of relationship between the members, i.e. based upon family, business, social or other common interest.

3.2.3     The securities of the issuer are not traded in any securities market.

3.2.4     The securities of the issuer are subject to restrictions on transfer.

3.2.5     The applicant issuer has either never made or, upon order being granted, would not make an offering of its securities to the public.

3.3        Even though all of the ingredients of a close corporation may exist in the applicant issuer, the overriding consideration will be the security holders' and public's "need and right to know" what is transpiring in the issuer.

3.4        Where the applicant issuer has a subsidiary which is a reporting issuer, an order will not issue unless the applicant can convince the Commission it would not be in the public interest to require the disclosure demanded by the reporting issuer provisions of the Act.  Similarly, where the applicant issuer is a subsidiary of a reporting issuer, the same principle will apply.

4.0        DOCUMENTS TO BE FILED

The application should be accompanied by the undernoted documents and information duly certified by at least one director of the applicant issuer:

4.1        A copy of the last Annual Report of the issuer.

4.2        An up-to-date list of members of the issuer showing the full name, address and number of securities held by each member.

4.3        A brief summary of the current business of the issuer.

4.4        A statement as to whether the issuer's constating documents:

4.4.1     limit the number of shareholders

4.4.2     restrict the transfer of shares

4.4.3     prohibit the offering of its securities to the public.

4.5        The relationship, if any, in a family, business, social or other sense, existing between the directors and shareholders.

4.6        A statement respecting whether the issuer:

4.6.1     is up-to-date in its filings under the Act and Company Act

4.6.2     has ever filed or issued a prospectus covering an offering of its securities in Canada, the United States of America or the United Kingdom.

4.7        A statement with respect to whether the issuer intends to seek public financing by way of an issue of securities.

4.8        A copy of the most recent financial statements.

4.9        Shareholders Resolution authorizing the application.

5.0        REGISTRAR OF COMPANIES

The Commission will forward to the Registrar of Companies, a copy of all orders issued by it.

 

DATED at Vancouver, B.C. this ______  day of ________________ 19 ___.

Jill Bodkin
Chairman
B.C. Securities Commission