Genuine investor

An individual will be treated as a genuine investor in a private company where:

• an actual injection of capital or equity has been made,
• the person who made the capital injection is not an [glossary:attributable stakeholder:615] of the company,
• the person receives shares in the company commensurate with the amount of capital injection,
• the person has a right to capital upon wind-up commensurate with the total capital injection,
• the person has a right to dividends reasonably commensurate with the total capital injection,
• the person is over 18 years of age at the time the capital injection was made, and
• in the opinion of the delegate, the injection of capital was genuine.

A genuine injection of capital in return for equity in a private trust can only occur where the trust is a fixed trust, and the person obtains [glossary:units:586] in return for the injection of capital. Genuine investors have the historical value of the injected equity capital assessed as their asset.