Exempt Offerings
We help issuers and dealers raise capital under Canadian prospectus exemptions with clear, regulator-ready documentation and efficient distribution processes.
How We Help
Entity Formation
- Incorporation/formation of issuer entities and organizational documents
- Share/unit class design and governance structuring
- Founder arrangements, reorganizations, and pre-raise cleanup
Offering Materials
- Exemption analysis and offering design under NI 45-106
- Subscription agreements, investor questionnaires, and ancillary documents
- Marketing, advertising, and sales practice compliance (KYC/KYP/suitability)
Offering Memoranda / Private Placement Memoranda
- Drafting, reviewing, and updating OMs and PPMs for funds and issuers
- Risk factor development
- Marketing package review
Ongoing Closings, Filings & Advisory
- Multijurisdictional filings and Form 45-106F1 reporting
- Rolling closes, investor onboarding, and subscription processing
- Coordination with exempt market dealers and finders
Typical Clients: Private issuers, real estate sponsors, fund managers, and exempt market dealers.
Exempt Offerings FAQ
General information only. Not legal advice. Viewing this content does not create a solicitor-client relationship.
National Instrument 45-106 ‘Prospectus Exemptions’ provides several commonly used exemptions in Ontario. The most frequently relied upon for private funds and private issuers are the Accredited Investor exemption (section 2.3), the Offering Memorandum exemption (section 2.9), the Minimum Amount exemption (section 2.10, available only to non-individual investors), the Private Issuer exemption (section 2.4), and the Friends, Family and Business Associates exemption (section 2.5).
Each exemption has specific eligibility criteria, disclosure obligations, and filing requirements. The appropriate exemption depends on the investor base, marketing strategy, and distribution model.
An investor qualifies as an Accredited Investor under section 1.1 and section 2.3 of NI 45-106 if they meet prescribed financial or institutional thresholds. For individuals, this commonly includes financial assets exceeding $1 million before taxes, net of related liabilities, or annual income exceeding $200,000 (or $300,000 with a spouse) in each of the two most recent years with an expectation of continuation.
Institutional investors, corporations with net assets of at least $5 million, registered advisers and dealers, and certain trusts and family offices may also qualify. Issuers must take reasonable steps to confirm the investor meets the specific accredited category relied upon.
An Offering Memorandum is required where the issuer relies on the Offering Memorandum exemption in section 2.9 of NI 45-106. In Ontario, this exemption allows distributions to a broader range of investors, including certain non-accredited individuals, subject to investment limits and prescribed disclosure.
If this exemption is used, the issuer must prepare an offering memorandum in the form required by Form 45-106F2 and deliver the required risk acknowledgment forms. The document must contain full, true, and plain disclosure of all material facts relating to the securities offered.
Yes. An Offering Memorandum is not required if the issuer relies solely on other prospectus exemptions under NI 45-106, such as the Accredited Investor exemption or the Private Issuer exemption.
In those cases, the issuer may use a term sheet or private placement memorandum as a matter of commercial practice, but there is no prescribed disclosure form under NI 45-106. However, all offering materials remain subject to statutory civil liability for misrepresentation under the Securities Act (Ontario).
Form 45-106F1 Report of Exempt Distribution must be filed within 10 days of each distribution made in reliance on most prospectus exemptions under NI 45-106. The filing is made electronically through SEDAR+ and must be accompanied by the applicable OSC filing fee.
In a continuous offering, a report is generally required after each closing. Timely filing is important, as late filings may result in penalties or impact future exempt distributions.
Dealer registration under NI 31-103 may be required where a person or entity is in the business of trading securities. This is a functional analysis under the Securities Act (Ontario) and considers factors such as frequency of trading, compensation tied to capital raised, solicitation activity, and holding out to the public.
Fund sponsors who actively market securities, receive transaction-based compensation, or regularly raise capital may trigger exempt market dealer registration requirements unless they distribute through a registered dealer in reliance on section 8.5 of NI 31-103. Each structure requires careful assessment before capital raising begins.
