This article Canada: "Substance Over Form" In Defining A Security discusses an Ontario court decision that promissory notes are securities under the Ontario Securities Act, unless they are more akin to the types of notes considered to not be securities, using the 'family resemblance test'. If the promissory notes are akin to a lien on assets by a small business, the notes are less likely to be characterized as securities.

Certain articles within this post were linked and referenced with the permission of Mondaq.com, through our exciting content collaboration with them. To access Mondaq’s large database of articles written by top law firm lawyers from around the world, you must leave our site and create a free account on theirs.