This is the issuer’s side of the coin. If you’re instead wondering whether you qualify as an accredited investor, start with what an accredited investor is. Here, you’re the company raising the money.
Normally, selling securities to the public requires a prospectus — a detailed, expensive, regulated disclosure document. The exemptions in National Instrument 45-106 let you skip that when you’re selling privately to people who don’t need the full public protections. The accredited investor exemption is the workhorse: the vast majority of private financings in Canada rely on it.
In brief, individuals generally qualify with financial assets over $1 million, income over $200,000 (or $300,000 with a spouse) in each of the last two years, or net assets of at least $5 million; various entities qualify too. The precise categories matter, and they’re set nationally by the Canadian Securities Administrators — the full detail is in our accredited investor guide.
Here’s the part founders underestimate. To rely on the exemption, you — not the investor — have to take reasonable steps to confirm each buyer actually qualifies. That’s done through an investor questionnaire and supporting representations, kept on file. An investor ticking a box isn’t enough if you had reason to doubt it. We cover the mechanics on our accredited investor verification page.
A clean raise runs on a proper subscription agreement, an investor questionnaire that actually establishes the exemption relied on, the prescribed risk acknowledgement form where a category requires it, and honest, careful offering materials. Whatever you tell investors has to be accurate — a misrepresentation in your materials is its own serious liability, exemption or not.
After closing, most exempt distributions require a report of exempt distribution (Form 45-106F1) to be filed — with a fee — in each jurisdiction where your investors reside, within a tight deadline. Missing it is one of the most common and most avoidable compliance failures in private financings.
If US investors are participating, the Canadian exemption has to line up with the US position (Regulation D or Regulation S). We handle the Canadian side and coordinate with US counsel where needed.
A private raise done right is genuinely efficient — but the “done right” is doing the verification, the documents, and the filing properly. If you’re planning a financing, that’s exactly the point to get it structured before the first cheque comes in. See our securities practice.
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