Patient Capital Investment
 6. (1) For the purposes of paragraph 5 of subsection 66.1 (4.10) and clause 66.1 (4.14) (b) of the Act, an investment made in a qualifying small business corporation or in a qualifying small business is used by the corporation or business for a prescribed purpose or in a prescribed manner if any part of the investment is used, (a) for a purpose other than gaining or producing income from an active business carried on primarily in Ontario by, (i) the qualifying small business corporation or by a qualifying small business corporation controlled by the qualifying small business corporation, in the case of an investment in a qualifying small business corporation, or (ii) the qualifying small business, in the case of an investment in a qualifying small business; or (b) directly or indirectly for the purposes of, (i) lending to another person, (ii) acquiring an interest in land, other than land in Ontario that is used directly and principally in an active business carried on primarily in Ontario by the qualifying small business corporation or qualifying small business in which the investment was made, (iii) purchasing or acquiring securities from any person, (iv) paying dividends or funding a return of capital to shareholders of the qualifying small business corporation, in the case of an investment in a qualifying small business corporation, (v) distributing income or funding a return of capital to the partners of the qualifying partnership, in the case of an investment in a qualifying partnership, (vi) financing the purchase or sale of goods or services provided by, (A) a
shareholder of the qualifying small business corporation or by a person related to a shareholder of the corporation, in the case of an investment in a qualifying small business corporation, (B) a partner of a qualifying partnership or a person related to a partner of a qualifying partnership, in the case of an investment in a qualifying partnership, or (C) a person related to the sole proprietor, in the case of an investment in a qualifying sole proprietor, (vii) repaying a loan or other amount, (A) advanced to the qualifying small business corporation by a shareholder, a person who was a shareholder at the time that the amount was advanced to the corporation, or to a person related to a shareholder or to a person who was a shareholder at the time that the amount was advanced to the corporation, in the case of an investment in a qualifying small business corporation, (B) advanced to the qualifying small business by a partner of the qualifying partnership, by a person who was a partner at the time the amount was advanced to the partnership or by a person who is related to a partner of the qualifying partnership or to a person who was a partner at the time the amount was advanced to the partnership, in the case of an investment in a qualifying partnership, or (C) advanced to the qualifying small business by a person related to the sole proprietor, in the case of an investment in a qualifying sole proprietor, or (viii) reinvestment outside Canada, other than the establishment and maintenance of an office outside Canada to promote sales by the business outside Canada.  O. Reg. 318/97, s. 6 (1); O. Reg. 299/98, s. 7 (1). (2) Despite subclauses (1) (b) (i) and (iii), an investment made in a qualifying small business corporation that is otherwise an eligible investment will not cease to be an eligible investment if the investment is used by the qualifying small business corporation to make an eligible investment in another qualifying small business corporation controlled by the qualifying small business corporation.  O. Reg. 318/97, s. 6 (2). (3) Subclause (1) (b) (vi) does not apply in respect of, (a) fees and other amounts normally charged by a financial institution to its customers for providing services in the ordinary course of the institution’s business; or (b) reasonable salaries and wages paid to employees.  O. Reg. 318/97, s. 6 (3); O. Reg. 299/98, s. 7 (2).