Manitoba’s Community Enterprise Development Program encourages investment in enterprises engaged in community development. Eligible enterprises can apply for funding through this program, and eligible investors can earn a generous income tax credit for getting involved.
To be an eligible investor for this program, you simply need to be a resident of Manitoba interested in investing. The program offers a tax credit of 45% on investments worth up to $60,000. If you invest the full amount, you receive a $27,000 tax credit. If you invest $10,000, your 45% credit is $4,500. Corporations may also invest; they face the same limitations and earn the same tax credits as individuals.
Applying for the Tax Credit
As an investor, you want to use Form T1256 Manitoba Community Enterprise Development Tax Credit to apply for your credit. If you made eligible investments, you should have received a T2CEDTC slip, Manitoba Community Enterprise Development Tax Credit, at the beginning of the year; use the information on that slip to fill out your form. You can base your credit on investments made in the previous tax year and the first 60 days of the current year, and you can roll unused credits forward for 10 years.
To apply for funding through the Community Enterprise Development Program, your enterprise must be based in Canada. It must have a maximum of $10,000 in net assets but can have up to $25 million in gross assets. The enterprise may employ up to 200 employees, and at least 25% of the total employees must reside in Alberta. Unfortunately, professional enterprises don’t qualify, and if your enterprise is involved with primary industries, mineral exploration, recreational activities, or commercial property development, it also can’t apply.
Applying for Funding
If your enterprise qualifies, you can apply to receive up to $3 million in repayable capital through this program. The application process is lengthy and detailed, and you need to submit the following elements:
- Business plan
- By-laws of your corporation
- Articles of incorporation
- Agreements on company shares and governance
- Financial statements
- Last corporate income tax return
Then, you must also explain how your enterprise plans to take advantage of this program. In particular, you need to outline what you plan to charge for shares and how you plan to use the proceeds of the shares. If you’re accepted, you receive a letter of offer. Then, you prepare an Offering Memorandum through the Manitoba Securities Commission, and finally, you can start accepting capital from investors.
There is no deadline for this program. For over a decade, Manitoba’s Community Enterprise Development Program has been accepting applications on a rolling basis, and it plans to continue to do so until the program is fully subscribed. As of 2017, you may apply through the post at CED Tax Credit Program, Growth, Enterprise and Trade, Suite 1040 259 Portage Avenue, Winnipeg Manitoba R3B 3P4. You can also get more information by emailing the program coordinator at firstname.lastname@example.org. This is just one of the many small business and individual tax credits available in Manitoba. Whether you’re a business owner, an investor, or an aspiring entrepreneur, it’s important to stay on top of federal and provincial credits so you can maximize your return and lower your tax liability.