A “Trade” (i.e. selling shares to investors in this case) triggers the “Registration” requirement, even if the trade is not a “distribution”. Just because there is not a prospectus requirement does not mean there is no registration requirement to sell the shares to an investor. However, most prospectus exemptions will come with a registration exemption to sell the shares.Assembling a prospectus is usually not cost-effective for most MICs, hence raising funds through selling shares needs to fall under an exemption under securities law, which will depend more so in which province your shareholders are located. Thus, most MICs will distribute their shares based on an exemption catered to the province they intend to solicit investors/shareholders from. Common Prospectus Exemptions Include:Accredited Investor:  Those investors who are sophisticated or deemed to be, such as institutions, governments, persons or companies who meet an income and asset test.“Private Issuer”, i.e. Closely-held Issuer Exemption: The shares are all subject to restrictions on transfer found in the Articles of Incorporation, and all the shares cannot be owned by more than 50 persons, not including employees, former employees, or corporate affiliates.  The purchasers must be a director/officer/employee of the MIC or Affiliate of the MIC, or close family, friends and business

The MIC itself will not pay income tax so long as the profits are flowed through to the shareholders and taxed in their hands. This is advantageous to an investor who has purchased MIC shares through a self-directed registered retirement savings plan (RRSP) or a self-directed registered retirement income fund (RRIF) as the tax is deferred until the funds are transferred or annuitized.In the case of Tax Free Savings Accounts (TFSA), the dividends earned are tax-free when withdrawn. Although taxable dividends received from the MIC are considered interest income, they do not qualify for any gross-up or dividend tax credit and are subject to full income inclusion by the shareholder (ITA 130.1 (2) and (3)). Although fraudulent occurrences are uncommon since MICs must produce audited financial statements each year, an investor can research to see if the MIC is subject to any lawsuits by reviewing its yearly financial

The creation of a MIC is similar to other corporations in the method of organization, election of directors/officers and the faculty to appoint committees, hire employees, and issue shares. Generally, a MIC will authorize and issue several different classes of shares including common voting shares and preferred non-voting shares. All classes will have pari-passu rights to dividends, if any, and to participation on winding-up.Provincially licensed mortgage brokers/agents and administrators are typically accountable for the management of the MIC; this involves sourcing, originating, underwriting, acquiring and administering mortgages that would provide the greatest rate of return with the lowest possible risk. The mortgage portfolio is continuously managed with newly invested share capital and the proceeds from repaid and discharged mortgages are utilized to fund new mortgages. MICs typically include a Credit Review Committee of shareholders who are responsible for the review and approval or rejection of mortgage applications in the portfolio. This is to protect shareholders’ investments while remaining cognizant of current market conditions and any potential underlying risks. Since brokers gain commission from placing mortgages, they are restricted from acting as members of Credit Committees due to an obvious conflict of interest. At the end of every fiscal year, audits of a MIC’s annual financial statements must be made by an independent accounting firm.

TYPE OF ENTITY FOR A MORTGAGE INVESTMENT CORPORATIONA Canadian Corporation throughout the taxation year where its business only undertakes to invest its funds, and thereafter qualifies as a MIC, is deemed to be a public corporation under the ITA, and therefore must have its financials audited. Depending on which province your MIC is registered, it will have to comply with securities legislation in that province;Depending on which province your shareholders or investors are, it will have to comply with securities legislation in that province;TYPE OF ACTIVITY & INVESTMENT/ASSET BASEMortgages secured against real estate in CanadaMortgagors can be individuals or corporateMortgagors can be Canadian non-residents

In September 2010 some significant changes were made to the SABS – the Statutory Accident Benefits Schedule. These changes impact what benefits are available to an injured person under their own automobile insurance policy.One of the changes relates to the amount of medical and rehabilitation benefits that available to an injured person. If you are declared to have injuries which are from “catastrophic accidents” then you can access up to $1,000,000 in these benefits; if you are “non-catastrophic” then you can access up to a maximum of $50,000.  However, if you are deemed to fall under the “Minor Injury Guideline”, known as the MIG, then the insurance company can limit your medical and rehabilitation benefits to $3,500.Since this new change in the law, insurance companies have tried to place as many people as possible into the MIG category, so as to limit

What you need to be aware of when buying or selling a home with an oil tankOn June 28, 2001, the Ontario Legislature enacted the new Technical Standard and Safety Authority (TSSA) Act, 2000, which outlines appropriate procedures for homeowners of buried or free standing fuel tanks on removal and maintenance.  Old underground oil tanks and poorly maintained or defective heating systems are the leading cause of oil spills and leaks, leading to costly cleanup in the hundreds of thousands.How does this affect you in selling or buying a home?A recent decision of the B.C. Supreme Court shows that you should be concerned about residential fuel tanks when buying and selling land, because the cost implications can be in the hundreds of thousands of dollars.In the case, a building inspector reported evidence of a buried oil tank because there was a vent and fill pipe and the inspector recommended locating the tank and testing for oil products. The homebuyers, Colbecks, did not act on the inspector’s recommendation until after they

Effective December 1, 2011, parents and grandparents of Canadian Citizens or Permanent Residents may apply for a Parent and Grandparent Super Visa to allow for extended visits to Canada for up to two years without having to renew their status.Parents or Grandparents from visa-exempt countries are still eligible to benefit from the super visa program in order to enjoy a two-year authorized stay in Canada.

With significant potential for favourable rates of return and previously instituted tax exemptions, Canadian Mortgage Investment Corporations (MIC’s) are increasingly becoming recognized as a low-risk method of investment. In 1972, the Residential Mortgage Financing Act was developed by the federal government to encourage private financing. The Act later functioned as a precursor to Section 130.1 of the federal Income Tax Act (ITA) which is responsible for setting out the “rules that apply to mortgage investment corporations and their shareholders”.[i]MICs were first established to provide investors with the opportunity to invest their money as shareholders into residential mortgages, and to own a portion of the MIC’s total portfolio. As a result, MICs have become known for their great advantages such as the direct flow-through of net income to investors with the exemption of corporate tax.[ii] MIC’s invest primarily in residential mortgages however mortgages in commercial, industrial, developmental and construction categories are also customary. Considering how volatile the stock market can be, the MIC is an excellent option for investors to receive consistent dividends while owning security against real property.

The City of Toronto has been experiencing a shift of rapid development, and the scarcity of property resources accessible for further growth have led developers to be creative with readily available structures such as heritage properties. The Ontario Heritage Act governs the provincial and municipal identification and protection of properties with what are considered as “heritage attributes”. These “attributes” are described in Section 1 of the OHA as characteristics of certain properties that contribute to the “cultural heritage value or interest” of the municipality. The general guidelines for designation can be found under s.29 of the OHA, and more detail-specific guidelines can be found in the Ontario Regulation 9/06 titled “Criteria for Determining Cultural Heritage Value or Interest”. If you’ve recently moved to Toronto, make sure you have a list of local contractors such as absolutedp.com in case of emergencies.Heritage Preservation Services (HPS) is the authority that protects heritage designated properties and guides the Toronto Preservation Board and City Council on matters relating to the OHA. The HPS typically manages heritage designation applications, the review of proposals regarding the development of heritage sites, maintenance of designated properties, and providing the policies, as well as

Prior to the end of 2001, professionals could not incorporate their practices except as allowed by the laws that regulated their specific profession (all compliant professional corporations prior to the enactment of the present governing regime were grandfathered in).  Today, regulated professionals are able to incorporate their practices.  Thanks to Bill 152 – Balanced Budgets for Brighter Futures Act, and Bill 45 – Responsible Choices for Growth and Accountability Act, professionals can capitalize on many of the same tax and non-tax advantages enjoyed by other incorporated self-employed individuals.However, unlike other incorporated self-employed individuals who are unregulated professionals, personal professional liability will not be limited through incorporation.  The shareholders of a professional corporation are restricted to licensed members of the same regulated profession, and depending on the profession, their immediate family members.  For those applicable professions, family members who are not licensed under the same regulated profession are restricted to participating only as non-controlling or non-voting shareholders.  The