Flow-through Share

Flow-through shares are a type of equity financing used primarily in the Canadian mining, oil, and gas industries. These shares allow companies to pass on tax deductions associated with exploration and development expenses to investors. By investing in flow-through shares, investors can reduce their taxable income, making them an attractive option for high-net-worth individuals seeking tax benefits. Flow-through shares help resource companies raise capital for exploration while offering tax incentives to investors.

Example

A mining company issues flow-through shares to finance its exploration project. Investors receive tax deductions for the exploration expenses, reducing their taxable income and enhancing the attractiveness of the investment.