Syndicating & raising money in Canada, is it legal?

4 Replies

I have been looking at real estate crowdfunding websites in Canada and it seems like they all require accredited investors (over $1m net worth, $200k+ income a year). My question is if I would be setting up a syndication in Canada, and I plan on raising money from people who are not accredited investors, who would I be able to legally accept money from? Friends and family? People in my network (acquaintances)? Friends of friends?

I've done a lot of research on this because I plan on doing it. It's legal with people you have existing relationships with, and up to a certain value (I want to say two million) and number of people (I want to say fifty). You can't advertise obviously. All you can do is talk to friends, family, co-workers.. etc.

Originally posted by @Jillian Sidoti :

In Canada, you basically have to follow US securities laws. You can still take in unaccredited investors, they just need to be sophisticated. 

You also need to use an LP as opposed to an LLC to take advantage of tax treaties.

Yep, LP is the way to go. Investors don't strictly need to be sophisticated - they just need to be people you have an existing relationship with.

I am tracking this as well and listened to a few of the podcasts. Everything I have read says a syndication is not able to do without accredited in Ontario. Does anyone have a pool of 4-10 people investing? Of course legalise with lawyers and an accountant and all of that needs to be done, but I would be interested in learning further, as I don't want to fall foul of FSCO

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