An issuer meeting the following provincial securities law criteria after a trade in its securities:
- the issuer is not a reporting issuer;
- shares of the issuer are subject to a restriction on transfer in its constating documents (the articles of a CBCA corporation) or a security holders’ agreement, requiring approval of either the board of directors or the shareholders of the issuer; and
- outstanding securities of the issuer are beneficially owned, directly or indirectly, by not more than fifty investors, not including current or former employees of the issuer or an affiliate of the issuer.
An issuer is just a business organization, like a corporation, that issues securities. Shares in a private issuer, as defined, may be sold to a variety of people who have some connection to the issuer, like its directors, officers, and employees and their friends and family, as well as to accredited investors and any person who is not considered the public without complying with the requirement to file a prospectus under provincial securities law.