18.11 (1) In this Part, “eligible business” means a taxable Canadian corporation or Canadian partnership that meets the criteria described in subsection (2); (“entreprise admissible”) “eligible business activity” and “intellectual property” have the meanings assigned by subsection 18.2 (1); (“activité commerciale admissible” et “propriété intellectuelle”) “eligible investor” means an accredited investor, as defined in National Instrument 45-106 entitled “Prospectus and Registration Exemptions”, as adopted by the Ontario Securities Commission, or a sponsor or an entity related to a sponsor, but does not include, unless otherwise prescribed, (a) a corporation registered under Part III as a labour sponsored investment fund corporation, (b) a corporation registered under Part III.1 as a community small business investment fund corporation, (c) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada), (d) the government of Canada or of any jurisdiction, or any crown corporation, instrumentality or agency of a Canadian federal, provincial or territorial government, (e) any Canadian municipality or any Canadian provincial or territorial capital city, (f) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction or any instrumentality or agency thereof, (g) an individual who is not resident in Canada, (h) a corporation or partnership that does not have a permanent establishment in Canada, (i) an investor who is a prescribed person or who is a member of a prescribed class; (“investisseur admissible”) “eligible research institute” has the meaning assigned by subsection 97 (27) of the Taxation Act, 2007; (“institut de recherche admissible”) “sponsor” means an eligible research institute that qualifies to apply for registration of a corporation or partnership as an Ontario commercialization investment fund under subsection 18.13 (1). (“commanditaire”)  2004, c. 31, Sched. 7, s. 9; 2006, c. 9, Sched. C, s. 6; 2006, c. 33, Sched. F, s. 1 (1); 2008, c. 19, Sched. V, s. 2 (8). Eligible business (2) A taxable Canadian corporation or Canadian partnership must meet the following criteria in order to be an eligible business in relation to an Ontario commercialization investment fund: 1. At the time of initial investment by an Ontario commercialization investment fund, the corporation or partnership must be commencing activities as a new business and must be primarily engaged in or planning to be primarily engaged in one or more of the following activities: i. the research, development and construction of a prototype, ii. the development of a manufacturing process, iii. the implementation of a marketing or distribution strategy for a product, or iv. a similar activity that is in respect of a service. 2. At the time of initial investment by an Ontario commercialization investment fund, the corporation or partnership has a reasonable expectation of profit. 3. The corporation or partnership has a total revenue determined in accordance with generally accepted accounting principles of less than the prescribed amount or, if no amount is prescribed, $500,000 from the time of its incorporation or formation until the time of the initial investment by an Ontario commercialization investment fund. 4. The corporation or partnership was formed to exploit intellectual property developed by individuals who, at the time of the initial investment by an Ontario commercialization investment fund or within three years before the time of initial investment, are faculty, staff or students of a sponsor of the Ontario commercialization investment fund. 5. During the period from January 1 of the year in which an initial or follow-on investment is made to the date of the particular investment, the corporation or partnership 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 in Ontario. 6. At the time of an initial or follow-on investment, at least 50 per cent of the full-time employees of the corporation or partnership are employed in respect of eligible business activities carried on by the corporation or partnership in Ontario. 7. In the case of a taxable Canadian corporation, the value of the total tangible assets of the corporation, together with the total tangible assets of all related corporations and the total tangible assets of all partnerships in which the corporation or a related corporation is a member, as determined at the time of the initial investment by an Ontario commercialization investment fund, does not exceed the prescribed amount or, if no amount is prescribed, $500,000. 8. In the case of a Canadian partnership, the value of the total tangible assets of the partnership, together with the total tangible assets of all affiliated persons, within the meaning of section 251.1 of the Income Tax Act (Canada), as determined at the time of the initial investment by an Ontario commercialization investment fund, does not exceed the prescribed amount or, if no amount is prescribed, $500,000. 9. In the case of a taxable Canadian corporation, the corporation was incorporated under the Business Corporations Act or the Canada Business Corporations Act. 10. In the case of a Canadian partnership, the partnership is in compliance with the laws of Ontario relating to partnerships.  2004, c. 31, Sched. 7, s. 9; 2006, c. 33, Sched. F, s. 1 (2-6). New business (3) For the purposes of subsection (2), a new business may include a business located in an existing incubator facility that provides workspace and business support services.  2004, c. 31, Sched. 7, s. 9. Eligible investment (4) An investment made by an Ontario commercialization investment fund is an eligible investment for the purposes of this Part if, (a) the investment is made before January 1, 2010 in a business that is an eligible business when the investment is made; (b) in the case of an investment in an eligible business that is a taxable Canadian corporation, the investment is, (i) the purchase from the eligible business by the Ontario commercialization investment fund of shares issued by the eligible business in exchange for a consideration paid in money, or (ii) the purchase of a warrant, option or right granted by the eligible business, in conjunction with the issue of a share that is an eligible investment, to acquire a share of the eligible business that would be an eligible investment if that share were issued at the time that the warrant, option or right was granted; (b.1) in the case of an investment in an eligible business that is a Canadian partnership, the investment is the contribution of capital, paid in money, to the eligible business by the Ontario commercialization investment fund in exchange for an interest in the partnership; and (c) the investment is not used or intended to be used by the eligible business for the purpose of, (i) relending, (ii) investment in land, except land that is incidental and ancillary to the eligible business activity or activities in which the eligible business is primarily engaged, (iii) reinvestment or the acquisition of any securities of any person, (iv) subject to subsection (5) or (6), financing the purchase or sale of goods or services provided to the eligible business by or through a shareholder of or partner in the Ontario commercialization investment fund or a person related to the shareholder or partner, (v) the payment of dividends, (vi) the return of capital to a shareholder or partner of the eligible business or the payment of the principal amount of outstanding liabilities owing to a shareholder or partner of the eligible business by the eligible business, (vii) the payment of the principal amount of outstanding liabilities owing to shareholders of the Ontario commercialization investment fund or to persons related to its shareholders, or to partners of the Ontario commercialization investment fund or to persons related to its partners, (viii) carrying on a business primarily outside Ontario, or (ix) any prescribed purpose or use.  2004, c. 31, Sched. 7, s. 9; 2006, c. 33, Sched. F, s. 1 (7-9); 2009, c. 34, Sched. D, s. 3. Exception (5) Subclause (4) (c) (iv) does not apply with respect to the purchase of goods or services from a shareholder or partner who is a sponsor of the corporation or from a person who is related to a shareholder or partner.  2004, c. 31, Sched. 7, s. 9. Same (6) Any amounts paid on the purchase of goods and services referred to in subclause (4) (c) (iv) are deemed not to include, (a) banking fees and other amounts normally charged by a bank to its customers for providing services in the ordinary course of the bank’s business; and (b) reasonable salaries and wages paid to employees.  2004, c. 31, Sched. 7, s. 9. Meaning of “related” (7) For the purposes of this Part, (a) two or more entities are related if they would be related under section 251 of the Income Tax Act (Canada); and (b) eligible investments made by an Ontario commercialization investment fund are related if the eligible businesses in which the investments are made are related.  2004, c. 31, Sched. 7, s. 9. Section Amendments with date in force (d/m/y) 2004, c. 31, Sched. 7, s. 9 - 16/12/2004 2006, c. 9, Sched. C, s. 6 - 14/09/2005; 2006, c. 33, Sched. F, s. 1 - 20/12/2006 2008, c. 19, Sched. V, s. 2 (8) - 1/01/2009 2009, c. 34, Sched. D, s. 3 - 15/12/2009