Incorporation
An Ontario company is formed with the preparation and filing of documents with the Ministry called Articles of Incorporation. The articles set out some important details about the make-up of the company including
- Where the registered office of the company will be located;
- How many and what classes of shares will the company be authorized to issue;
- Whether there will be restrictions on share transfers to ensure that the corporation remains “private”;
- How many directors will be appointed;
- Will there be a set number of directors or a minimum and maximum number?
- Will there be restrictions on the types of activities or type of business that the corporation may conduct; and
- Are there any other restrictions or clauses that should be included in the articles?
The answers to the questions above vary according to the specific requirements of each individual’s situation. We would strongly recommend that you consult your lawyer and your accountant prior to completing the articles of incorporation.
Shareholder Agreements
A shareholders’ agreement is an arrangement among a company’s shareholders describing how the company should be operated and the shareholders’ rights and obligations. A well-drafted agreement sets out clear rules that define the relationship between the shareholders and outlines how the corporation will be controlled and managed. It can serve as a useful tool in dispute resolution and allows the shareholders to control who continues to be a shareholder and to place restrictions on new shareholders coming into the corporation.
One of the most important provisions in a shareholders’ agreement – the “buy-sell provision”—allows the existing shareholders to purchase the shares of a shareholder on the occurrence of certain events. Such events are generally the death, insolvency, disability, retirement, or voluntary withdrawal of the shareholder from the corporation.
Many people going into business together believe that a dispute will not arise and, hence, that an agreement dealing with a breakdown of that relationship is not necessary. This can be a mistake. Similar to discussions relating to marriage or cohabitation agreements, having an agreement in writing in advance of a dispute can help all of the parties work together more amicably knowing that there is a mechanism in place for resolving any differences.
Let us help you draft an agreement catered to your and your business’s needs.
Professional Corporation Annual Renewals
Keeping your corporate minute book updated is not only important for your own business records – under law you are legally required to hold annual meetings, sign resolutions, and keep updated records of the corporation.
These updates include information on directors and shareholders, finances and relevant resolutions and minutes.
There can be substantial government-issued fines for failing to meet your obligations under the law.
Our firm acts for many small to medium sized businesses to ensure that their records are well maintained and that they are meeting all of their annual corporate law requirements. Please contact us to discuss how we may assist you in keeping your corporate minute book updated.
Minute Book Updating
Keeping your corporate minute book updated is not only important for your own business records – under law you are legally required to hold annual meetings, sign resolutions, and keep updated records of the corporation.
These updates include information on directors and shareholders, finances and relevant resolutions and minutes.
There can be substantial government-issued fines for failing to meet your obligations under the law.
Our firm acts for many small to medium sized businesses to ensure that their records are well maintained and that they are meeting all of their annual corporate law requirements. Please contact us to discuss how we may assist you in keeping your corporate minute book updated.
Share Purchase Agreements
Share Purchase Agreements can be quite complex, depending on the nature of the underlying business, and require an experienced and trained eye to deal with issues such as
- assumption of leases,
- existing employee agreements,
- comprehensive due dilligence clauses,
- indemnity agreements,
- income tax considerations and other myriad provisions to protect the parties respective interests.
The most common way to buy or sell a business in Ontario is to enter into an Asset Purchase Agreement to buy or sell some or all of the assets of business such as
- inventory,
- equipment,
- leaseholds,
- goodwill and, if desired,
- the trade name of the business.
There are times, however, when it may be beneficial to a seller or a buyer, for tax reasons or otherwise, to buy or sell all of the outstanding shares of the company that owns the business. The contract used to carry out such a transaction is a Share Purchase Agreement.
The terms contained in such an agreement are similar to those found in an Asset Purchase Agreement except that, instead of buying or selling the individual assets, the parties contract to deal with all of the shares of the company that owns the business.
Please contact us – We have the necessary experience and the expertise to draft comprehensive Share Purchase Agreements.
Annual Renewals/Minutes/Resolutions
Keeping your corporate minute book updated is not only important for your own business records – under law you are legally required to hold annual meetings, sign resolutions, and keep updated records of the corporation.
These updates include information on directors and shareholders, finances and relevant resolutions and minutes.
There can be substantial government-issued fines for failing to meet your obligations under the law.
Our firm acts for many small to medium sized businesses to ensure that their records are well maintained and that they are meeting all of their annual corporate law requirements. Please contact us to discuss how we may assist you in keeping your corporate minute book updated.
Change of Directors/Resignations/Elections
Keeping your corporate minute book updated is not only important for your own business records – under law you are legally required to hold annual meetings, sign resolutions, and keep updated records of the corporation.
These updates include information on directors and shareholders, finances and relevant resolutions and minutes.
There can be substantial government-issued fines for failing to meet your obligations under the law.
Our firm acts for many small to medium sized businesses to ensure that their records are well maintained and that they are meeting all of their annual corporate law requirements. Please contact us to discuss how we may assist you in keeping your corporate minute book updated.
Corporate Law Forms
Methods of Carrying on Business
Starting a new business involves many decisions. One of the most important decisions is what type of legal structure to select for the new business entity and this decision should be made in consultation with your business professionals including your lawyer and accountant or tax professionals.
When a client asks me what type of entity is best for their new business, my initial answer is that it depends upon their individual circumstances, needs, and objectives.
Almost all clients are interested in selecting a form of entity that will provide them with liability protection, but beyond that objective, the goals of clients generally differ and it is necessary to understand the circumstances of the client.
Among the choices of a sole proprietorship, partnership or a corporation, I find that with the relatively low cost of forming and maintaining a corporation, the ability to use the corporation with one or multiple owners and the flexibility available in structuring a corporation, my clients usually determine a corporation is the best choice for them.
Having said that, however, choosing the right form of business entity should not be made without discussing the matter with your tax professional because there are tax consequences that must also be considered in making your choice.