Private equity funds are active participants in merger and acquisition transactions in Canada. Set forth below is a brief discussion on some legal topics that are particular to private equity funds.
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A private equity fund that proposes to distribute its securities to persons located in Canada must either qualify the distribution pursuant to a prospectus prepared and filed in accordance with applicable Canadian securities regulatory requirements or it must conduct the distribution in reliance upon a prospectus exemption, such as the private-issuer exemption. The private-issuer exemption is available for a distribution of securities by a private issuer to a prescribed class of persons who purchase the securities as principal. By relying on this exemption, a private issuer can raise any amount of capital through any number of financings with no prospectus requirement.
When forming a private equity fund in Canada, consideration should be given to the application of dealer registration, adviser registration and investment fund manager registration requirements to the establishment and operation of the fund. A person is required to register as a dealer under Canadian securities laws if it engages in, or holds itself out as engaging in, the business of trading securities. A person is required to register as an adviser if it engages in, or holds itself out as engaging in, the business of advising others as to the investing in, or the buying or selling of, securities. A person is required to register as an investment fund manager if it acts as the manager of an investment fund. Depending on the activities to be undertaken by a private equity fund, it can be structured in such a manner so that it is exempt from dealer registration, adviser registration and investment fund manager registration requirements.
Private equity investments in Canada are similar to traditional mergers and acquisitions. When acquiring public companies, the legal analysis with respect to take-over bids, plans of arrangement and mergers/amalgamations is applicable. As most investments by private equity investors are leveraged with debt, special consideration should be paid to the financing of the acquisition (particularly reducing or removing financing conditions that are incremental to the conditions in the principal purchase agreement).
Private equity funds may acquire majority or minority interests and therefore shareholder agreements (or similar operating agreements, such as partnership agreements) become increasingly important for governance, control, capital contributions, distributions and liquidity rights or restrictions (such as tag-along rights, drag-along rights, rights of first refusal, rights of first offer and ownership restrictions).
As private equity investments are made for a set time frame, tax structuring is very important to ensure an efficient structure is utilized, particularly for cross-border investments by U.S. private equity funds. Similar to the U.S., there are many exit strategies that can be utilized by private equity funds in Canada. Typical exit strategies exercised in Canada are a sale to:
(i) the current management through a management buyout;
(ii) other shareholders through share/unit transfer rights set out in the shareholder/partnership agreement;
(iii) a third party through either a private sale or a controlled auction; or
(iv) the public through an IPO.
在加拿大成立私募股权投资基金时, 需要充分考虑那些为建立和基金运作的证券交易商，投资顾问和投资基金经理登记的规定。依照加拿大证券法，凡是从事证券买卖交易的人士则须登记为证券交易商 （dealer）； 凡是从事向他人提供投资顾问的人士，则须登记为投资顾问 （adviser）；凡是从事投资基金管理的人士, 则须登记为投资基金经理 (investment fund manager)。不过根据私募股权投资基金所开展的项目, 可以通过一些策划使其免受证券交易商,投资顾问、和投资基金经理的登记要求。
私募股权投资可以获得多数或少数股权,因此股东协议（或类似的管理协议，比如合伙协议）对于治理、控制、出资、分配以及流动资金的权利和限制 (如随售权，拖售权，优先认股权和所有权限制) 变得越来越重要。
另外，私募股权投资是在限定的时间内进行, 因而为了确保最有效的收益, 税务规划非常关键，特别是对于美国私募股权的跨国投资。最后，类似美国, 加拿大私募股权投资也有许多退出战略。在加拿大, 典型的私募股权退出的方式包括：
- 将股权通过私下交易或受控拍卖转让给第三方； 和