Private company

A term used colloquially and in many places in this book, along with “private corporation,” to refer to any corporation that has a small number of shareholders, where the shares of which do not trade in a public market. Previously, “private company” was defined in the Ontario Securities Act as a corporation whose articles provide that the number of shareholders shall not exceed fifty, exclusive of employees and former employees, share transfer is restricted and any invitation to the public to subscribe for its securities is prohibited. Shares of such a corporation could be traded without complying with the requirement to file a prospectus under the Securities Act. This exemption has been replaced by the “private issuer” exemption.