Canada · Crowdfunding

Regulations for donation/reward-based crowdfunding in Canada

Mohi Sanisel Student of Entrepreneurship | Founded couple of startups

September 29th, 2020

Hello everyone,

I'm launching a crowdfunding platform and I need some legal advice.

The platform will work with donation/reward-based model and it will raise funds from all around the world for projects all around the world (not necessarily located in Canada).

I'm living and working in Canada and I have to obey Canadian regulation in this matter. I Googled about the crowdfunding regulations in Canada and it seems that only equity crowdfunding is regulated in Canada. Does it mean other types of crowdfunding are illegal and should be avoided?

On the other hand, I don't want to register a charity because the platform would be for-profit.

Can anyone please help me with my legal concern? Or can you please refer me to a person/center who can help me with answering my legal questions?

Paul Garcia marketing exec & business advisor

September 29th, 2020

Sorry, no attorney can give legal advice without you being a client. You will need to seek local counsel to make sure you are following regulation. My suggestion would be to start by contacting the ministry that governs the crowdfunding you did find information about and ask for clarification. Most laws are explicit, meaning if something is not mentioned or covered in the text, it is not considered. There are sometimes definitions within laws describing what some terms mean, if there might be confusion. Regardless, the ministry should be able to help you interpret correctly. As for international fundraising regulations, there are lots of them. What you need to probably watch out for most is getting flagged for money laundering when accepting transfers from abroad.

Brandon Leitch Building a team!

September 29th, 2020

Find a investment lawyer. I read into this a few years back and i thought they had updated the regulations to include crowd-funded investments. Their are a few companies i looked into at the time, based in Canada, that were doing this. You should try and google competitors and research their methods.

If all fails, you can register an llc/for-profit business as an out of country resident in Delaware and other states.

Jinesh Parekh Looking for sales professionals in US

September 30th, 2020

Is the reward cash-based? We launched one in India. Its not live but we had rewards based on scratch cards. One donor could make big cash. If that is what you are looking at, you will need to get in touch with a lawyer who can give you a legal opinion that it is not a lottery. Fasken is one of the law firms I trust. If you get a legal opinion from there, you should be good.

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