1993 Legislative Session: 2nd Session, 35th Parliament
FIRST READING
The following electronic version is for informational purposes only.
The printed version remains the official version.
HONOURABLE DAVID ZIRNHELT
MINISTER OF ECONOMIC DEVELOPMENT,
SMALL BUSINESS AND TRADE
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 The Employee Investment Act, S.B.C. 1989, c. 24, is amended by adding the following section to Part 2:
24.1 Notwithstanding the Company Act, an employee venture capital corporation, subject to its memorandum and articles,
(a) may allot or issue fractional shares for any purpose, and
(b) may purchase or redeem any of its fractional shares and need not consolidate them into whole shares.
2 The following section is added to Part 2:
24.2 (1) An employee venture capital corporation may elect to maintain a separate paid up capital account for each class and series of shares that it issues, and shall, from the date of that election, maintain those accounts in accordance with this section.
(2) An employee venture capital corporation shall add to the paid up capital account maintained for a class or series of shares
(a) the full amount, without supplement or deduction, of any consideration received by the employee venture capital corporation for the issue of shares of that class or series of shares, whether those shares were issued before or after the creation of the account, and
(b) any other amounts, including, without limitation, amounts credited to a retained earnings or other surplus account that may be approved,
(i) in the case of an employee venture capital corporation that has outstanding shares of more than one class or series of shares, by special resolution, or
(ii) in any other case, by the directors.
(3) Notwithstanding subsection (2) (a), if it is authorized to do so by a special resolution, an employee venture capital corporation may, in respect of a specific issue of shares, add less to the paid up capital account maintained for the class or series of shares out of which the shares were issued than the full amount of the consideration it received for the issue of those shares.
(4) An employee venture capital corporation shall not reduce the balance in any paid up capital account except as provided for in this section.
(5) An employee venture capital corporation shall deduct from the paid up capital account maintained for a class or series of shares
(a) where shares of that class or series of shares are purchased, redeemed or otherwise acquired by the employee venture capital corporation and are subsequently cancelled, the amount of the paid up capital that is attributable to those purchased, redeemed or acquired shares, and
(b) the amount by which paid up capital in respect of those shares is reduced under section 257 of the Company Act.
(6) On a conversion, exchange or change of issued shares of an employee venture capital corporation into shares of another class or series of shares of the employee venture capital corporation, the employee venture capital corporation shall
(a) deduct from the paid up capital account maintained for the class or series of shares of which the shares converted, exchanged or changed formed a part, the amount of the paid up capital that is attributable to those converted, exchanged or changed shares, and
(b) add to the paid up capital account maintained for the class or series of shares into which the shares were converted, exchanged or changed
(i) an amount equal to the amount referred to in paragraph (a), and
(ii) any additional consideration the employee venture capital corporation receives as a result of the conversion, exchange or change.
(7) For the purposes of subsections (5) (a) and (6) (a), the amount of paid up capital that is attributable to the shares referred to in those subsections as having been purchased, redeemed, acquired, converted, exchanged or changed, as the case may be, is the result obtained by
(a) multiplying the balance in the paid up capital account maintained for the class or series of shares of which the shares referred to in subsections (5)
(a) and (6) (a) formed a part by the number of the shares of that class or series of shares that were purchased, redeemed, acquired, converted, exchanged or changed, and
(b) dividing the result of the calculation referred to in paragraph (a) by the number of issued shares of that class or series of shares that were outstanding immediately before the purchase, redemption, acquisition, conversion, exchange or change.
3 Section 8.8 (1) and (2) of the Income Tax Act, R.S.B.C. 1979, c. 190, is repealed and the following substituted:
(1) In this section
"net employee investment tax credit" means, in relation to a taxpayer's taxation year, the aggregate of the tax credit amounts shown on all tax credit certificates issued to a taxpayer for share purchases made during the taxation year or within 60 days after the end of the taxation year, less the portion of that aggregate amount that was deducted from the taxpayer's tax otherwise payable under this Part for the immediately preceding taxation year;
"tax credit certificate" means a tax credit certificate issued by the administrator under section 7 or 24 of the Employee Investment Act;
"tax otherwise payable" means the amount that would, but for section 120.1 of the federal Act, be the tax otherwise payable under this Act.
(2) There may be deducted from the tax otherwise payable by a taxpayer under this Part in respect of a taxation year the lesser of
(a) the taxpayer's net employee investment tax credit for that taxation year, or any lesser amount that the taxpayer elects to deduct, and
(b) $2 000.
4 (1) Section 1 shall be deemed to have come into force on November 26, 1992 and is retroactive to the extent necessary to give it effect on and after that date.
(2) Sections 2 and 3 come into force by regulation of the Lieutenant Governor in Council.
SECTION 1: permits an employee venture capital corporation to issue and allot fractional shares and to reacquire them without having to consolidate them into whole shares.
SECTION 2: permits an employee venture capital corporation to create paid up capital accounts for each class and series of issued shares and specifies how those accounts are to be maintained.
SECTION 3: permits a taxpayer, subject to the $2 000 deduction limit, to elect to deduct some or all tax credits derived from share purchases made within 60 days after the end of one of the taxpayer's taxation years from the tax otherwise payable by that taxpayer in the taxation year in which the purchases were made or in the immediately preceding taxation year.
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