Selling Securities

A company that wants to offer its securities to the public in Ontario must prepare a detailed disclosure document known as a prospectus. A prospectus contains key information about the company and the securities being offered. In addition, any trade in a security must be made by a person or company that is registered in accordance with the provisions of the Securities Act (Ontario). For more information on registration requirements see Information for Dealers, Advisers, and Investment Fund Managers.

Companies use different types of prospectuses to sell their securities, depending on their stage of development and the nature of the offering. The main types are the long-form prospectus, the short-form prospectus, the shelf prospectus and the post-receipt pricing prospectus.

In certain cases, securities may be offered without a prospectus. Such offerings are sometimes referred to as private placements or exempt distributions. Most exemptions from the prospectus requirement are set out in National Instrument 45-106 Prospectus and Registration Exemptions.

One common exemption that may be available to a company that has previously issued shares is the ability to distribute rights to purchase shares of the company to its existing shareholders. For more information see Rights Offerings.