12 (1) In this Part, “eligible business” means a taxable Canadian corporation or Canadian partnership, (a) that is primarily engaged in eligible business activities, (b) that pays 50 per cent or more of its wages and salaries to employees whose ordinary place of employment is a permanent establishment of the corporation or partnership located in Ontario, (c) that has 50 per cent or more of its full-time employees employed in respect of eligible business activities carried on by the corporation or partnership in Ontario, (d) that, at the time the labour sponsored investment fund corporation makes the investment in the taxable Canadian corporation or Canadian partnership, (i) has total gross assets, together with the total gross assets of all related corporations and partnerships, not exceeding $50,000,000, calculated in the prescribed manner, or such other amount as may be prescribed, (ii) together with all related corporations and partnerships, does not have more than 500 employees, or such other number as may be prescribed, and (iii) has been primarily engaged in eligible business activities for at least two years, or for the total length of time it has been carrying on any business if it has carried on business less than two years, and (e) that is not an investment corporation registered under Part III.1 or III.2; (“entreprise admissible”) “eligible investment in a research business” means, with respect to a particular labour sponsored investment fund corporation, an investment described in subsection (3); (“placement admissible dans une entreprise de recherche”) “eligible investor” means, in respect of a particular Class A share of a corporation registered under this Part, (a) an individual who subscribes for the share, but not an individual who is a trust, (b) an individual who is an annuitant (as defined in subsection 146 (1) of the Income Tax Act (Canada)) of a qualifying trust that subscribes for the share, (b.1) an individual who is a holder, as defined in subsection 146.2 (1) of the Income Tax Act (Canada), of a trust governed by a tax-free savings account that subscribes for the share, if the trust is a qualifying trust under subsection 127.4 (1) of that Act, or (c) a spouse or common-law partner of an individual described in clause (b); (“investisseur admissible”) “qualifying debt obligation” means a debt obligation, (a) that, if secured, is secured, (i) by a security interest in one or more assets of the entity and the terms of the debt obligation or any agreement relating to the debt obligation do not prevent the entity from dealing with its assets in the ordinary course of business before any default on the debt obligation, (ii) by a guarantee, or (iii) by both a security interest described in subclause (i) and a guarantee, and (b) that by its terms or by the terms of any agreement relating to the debt obligation does not entitle the holder of the debt obligation to rank ahead of any other secured creditor of the issuer in realizing on the same security unless, (i) the debt obligation is prescribed to be a small business security for the purposes of paragraph (a) of the definition of “small business property” in subsection 206 (1) of the Income Tax Act (Canada), or (ii) the other secured creditor is a shareholder of the corporation or a person related to the shareholder; (“créance admissible”) “scientific research and experimental development expenses” means, with respect to expenses incurred by an entity in a fiscal year, the total of all expenses incurred by the entity in the year that are described in subparagraph 37 (1) (a) (i), (i.1) or (ii) or 37 (1) (b) (i) or (ii) of the Income Tax Act (Canada). (“dépenses afférentes aux activités de recherche scientifique et de développement expérimental”)  1992, c. 18, s. 12; 1994, c. 17, s. 82; 1997, c. 43, Sched. C, s. 5 (1, 2); 1999, c. 9, s. 52; 2000, c. 42, s. 3 (1-3); 2004, c. 16, s. 1 (2); 2004, c. 31, Sched. 7, s. 3 (1); 2006, c. 9, Sched. C, s. 2; 2009, c. 18, Sched. 7, s. 1; 2009, c. 34, Sched. D, s. 1 (1). Deemed eligible business, flow-through investment (1.1) A taxable Canadian corporation or Canadian partnership that is not an eligible business under subsection (1) only because it is not primarily engaged in eligible business activities shall be deemed to be an eligible business for the purposes of this Part if, within a reasonable number of days after the labour sponsored investment fund corporation makes an investment in the corporation or partnership, the corporation or partnership invests all or substantially all of the amount of the investment in a corporation or partnership that meets the definition of “eligible business” under subsection (1).  2004, c. 31, Sched. 7, s. 3 (2). Calculating number of employees (2) For the purpose of determining the number of employees under subclause (d) (ii) of the definition of “eligible business”, an employee who normally works at least 20 hours per week shall be counted as one employee and an employee who normally works less than 20 hours per week shall be counted as half an employee.  1997, c. 43, Sched. C, s. 5 (3); 2004, c. 16, s. 1 (2); 2004, c. 31, Sched. 7, s. 3 (3). Eligible investment in a research business (3) For the purposes of this Part, an eligible investment in a research business by a labour sponsored investment fund corporation for a particular calendar year is an investment by the corporation in an entity that is a taxable Canadian corporation or a Canadian partnership and with respect to which the circumstances described in one or more of the following paragraphs exist: 1. At least 50 per cent, or such other percentage as may be prescribed, of the total expenses incurred by the entity during the entity’s most recent fiscal year ending before the day on which the investment was made and for which financial statements are available are scientific research and experimental development expenses. 2. If the entity was established in the calendar year or in the previous calendar year, or if it first began business in one of those calendar years, i. the entity undertakes to incur scientific research and experimental development expenses in the fiscal year in which the investment is made, or in the following fiscal year, in an amount equal to at least 50 per cent, or such other percentage as may be prescribed, of its total expenses for the year, and ii. the labour sponsored investment fund corporation accepts the undertaking. 3. The entity fulfilled an undertaking given in a previous year under paragraph 2. 4. The entity was formed to exploit intellectual property developed by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution and, i. at least 10 per cent of the issued and outstanding voting shares of the entity or 10 per cent of the value of all partnership interests in the entity, as the case may be, are held by a Canadian institution that is a university, college, research institute, hospital or other prescribed research institution, and ii. the amount of the scientific research and experimental development expenses incurred by the entity in the entity’s fiscal year in which the labour sponsored investment fund corporation makes its investment is equal to at least 50 per cent or such other percentage as may be prescribed of the amount invested by the corporation in the entity in the fiscal year.  2000, c. 42, s. 3 (4); 2002, c. 22, s. 20; 2004, c. 16, s. 1 (2); 2009, c. 34, Sched. D, s. 1 (2). Date of Class A share redemption (4) For the purpose of sections 14 and 14.1, when determining the date on which a Class A share of a labour sponsored investment fund corporation that was issued in February or March is redeemed, a redemption that occurs in February or on March 1 shall be deemed to occur on March 31.  2000, c. 42, s. 3 (4); 2004, c. 16, s. 1 (2). Capital available for investment (5) For the purposes of this Part, a labour sponsored investment fund corporation’s capital available for investment at a particular time is the amount, if any, by which “A” exceeds “B” where, “A” is the total cost of all investments and property held by the corporation at that time, each of which was an eligible investment as defined in section 18 or in subsection 204.8 (1) of the Income Tax Act (Canada) at the time the investment was made or is property maintained in a reserve as defined in subsection 19 (2), and “B” is 20 per cent of the net value of the corporation’s total assets at that time.  2000, c. 42, s. 3 (4); 2004, c. 16, s. 1 (2). Section Amendments with date in force (d/m/y) 1994, c. 17, s. 82 (1, 3) - 20/05/1993; 1997, c. 43, Sched. C, s. 5 - 7/05/1997; 1999, c. 9, s. 52 - 14/12/1999 2000, c. 42, s. 3 (1, 3, 4) - 21/12/2000; 2000, c. 42, s. 3 (2)
- 1/01/2001 2002, c. 22, s. 20
- 9/12/2002 2004, c. 16, s. 1 (2)
- 1/01/2004; 2004, c. 31, Sched. 7, s. 3 - 16/12/2004 2009, c. 18, Sched. 7, s. 1 -5/06/2009; 2009, c. 34, Sched. D, s. 1 (1, 2) - 15/12/2009