600 plain-language Q&As about corporate. Browse below, or search the whole library.
Amalgamation is a process under the Business Corporations Act (Ontario) by which two or more Ontario corporations combine into a single continuing…
Read the full answer →An amalgamation is a statutory process under Ontario's Business Corporations Act (or the Canada Business Corporations Act for federal companies) in…
Read the full answer →Generally, no. Ontario contract law requires fresh consideration, meaning something new of value flowing to the employee, for a change to an existing…
Read the full answer →Generally, yes, in many circumstances. If the scope of collateral actually intended to secure the loan expands beyond what the original financing…
Read the full answer →A shareholder agreement is a contract, and like any contract it can be amended by the agreement of the parties to it. Most shareholder agreements…
Read the full answer →Both are fundamental documents, but they serve different purposes and live in different places. Articles of incorporation are filed with the government…
Read the full answer →When you buy a business in Ontario, you typically do it through either an asset purchase or a share purchase, and the choice affects what you acquire,…
Read the full answer →Generally, yes, but almost always subject to the landlord's consent, since most commercial leases in Ontario include a clause requiring the tenant to…
Read the full answer →Yes. A lender holding a registered security interest under Ontario's Personal Property Security Act can generally assign or sell that interest,…
Read the full answer →Most commercial leases in Ontario contain provisions governing assignment — the transfer of the tenant's interest in the lease to a new tenant.…
Read the full answer →Authorized shares are the maximum number (or, in Ontario, an unlimited number if the articles so state) of shares that a corporation is permitted to…
Read the full answer →Becoming a member of an Ontario co-operative generally involves applying to the co-operative, meeting whatever eligibility criteria the co-operative…
Read the full answer →What happens depends heavily on how the gift was worded and what actually happened to the organization. If the will names a specific charity that has…
Read the full answer →A blanket security agreement, generally another way of describing a broad general security agreement, gives a lender a security interest over…
Read the full answer →Exercising dissent rights under the OBCA does not block or veto the underlying fundamental change itself — if the required shareholder vote, often a…
Read the full answer →Under PIPEDA, a breach of security safeguards involving personal information triggers specific obligations once there's a real risk of significant harm…
Read the full answer →Business interruption insurance is designed to replace lost income and cover certain ongoing expenses when your business cannot operate normally…
Read the full answer →This depends entirely on whether the IP was ever properly assigned to the business, which is exactly why it becomes a problem so often — many…
Read the full answer →In Ontario, you only need to register a business name under the Business Names Act if you trade under a name that is different from your own legal…
Read the full answer →No, and this is one of the most common misunderstandings in Ontario business law. Registering a business name under the Business Names Act is an…
Read the full answer →Practically, yes, even though the federal Personal Information Protection and Electronic Documents Act, which governs most Ontario businesses' handling…
Read the full answer →Ontario entrepreneurs can choose from several structures, each with different liability, tax, and governance characteristics. A sole proprietorship is…
Read the full answer →A shotgun clause (formally a mandatory buy-sell provision) is a mechanism in a shareholder agreement for resolving deadlock between co-shareholders who…
Read the full answer →Yes. Ontario partnership law doesn't restrict partners to individuals — a corporation, as its own legal person, can be a partner in a general…
Read the full answer →Yes. In Ontario, the same individual can serve simultaneously as a director and an officer — for example, as a director and the president or secretary…
Read the full answer →Yes. Ontario has no director residency requirement. Every director of an Ontario corporation can be a non-resident, and the board can be entirely…
Read the full answer →Yes. A corporation incorporated in a foreign country (outside of Canada) can carry on business in Ontario, but it must register as an extra-provincial…
Read the full answer →Ontario courts distinguish between two types of clauses that set a fixed sum for breach of contract: liquidated damages clauses and penalty clauses. A…
Read the full answer →Yes, you can incorporate an Ontario corporation yourself through the Ontario Business Registry without a lawyer. The process is available online, and…
Read the full answer →Yes. Ontario environmental legislation, including the Environmental Protection Act, can impose personal liability on directors and officers of…
Read the full answer →Yes, an Ontario corporation can carry on business in other Canadian provinces, but it may need to register as an extra-provincial corporation in each…
Read the full answer →Generally, no — not directly. The Ontario Business Corporations Act vests the authority to manage or supervise the management of the business and…
Read the full answer →Yes. The Ontario Business Corporations Act gives shareholders the right to remove a director before the end of their term by passing an ordinary…
Read the full answer →Yes. Since reforms to the Income Tax Act's charity rules, a Canadian registered charity can make a "qualifying disbursement" directly to a foreign…
Read the full answer →Yes, the Canada Business Corporations Act (CBCA) and the Ontario Business Corporations Act (OBCA) are similar in many ways but differ on several…
Read the full answer →Canadian charity law recognizes four broad categories of charitable purpose, a classification with roots in English common law that Canadian courts and…
Read the full answer →A registered charity has to keep adequate books and records that let the Canada Revenue Agency verify that donations were used for charitable purposes,…
Read the full answer →There is no simple percentage or dollar figure that draws this line — the Canada Revenue Agency instead applies a "related business" test. A registered…
Read the full answer →The Canada Revenue Agency designates every registered charity as one of three types: a charitable organization, a public foundation, or a private…
Read the full answer →As a general rule, directors of a registered charity should not be paid simply for serving as a director — this reflects a long-standing principle,…
Read the full answer →Yes. A registered charity can issue an official donation receipt for a gift of property — sometimes called a gift in kind — such as artwork, real…
Read the full answer →Yes, and this is the standard structure Canadian charities use to run a genuinely commercial, unrelated business without jeopardizing their charitable…
Read the full answer →An official donation receipt is the specific document a registered charity issues so a donor can claim a charitable tax credit or deduction under the…
Read the full answer →A registered charity can generally engage in public policy dialogue and development activities connected to its charitable purposes — commenting on…
Read the full answer →When the Canada Revenue Agency revokes a charity's registration, the organization becomes subject to a special tax under the Income Tax Act sometimes…
Read the full answer →The most common trigger is simply failing to file the charity's annual T3010 information return — this accounts for a large share of all revocations…
Read the full answer →Yes, and this is one of the more straightforward ways charities can support each other's work. A gift from one registered charity to another qualifies…
Read the full answer →Closing your business doesn't end your obligations under the lease on its own — unless the lease includes an early termination right, you generally…
Read the full answer →Closing conditions in an Ontario business purchase agreement are requirements that must be satisfied before the parties are obligated to complete the…
Read the full answer →Yes. An Ontario co-operative, like a regular business corporation, is governed by an elected board of directors responsible for overseeing the…
Read the full answer →Ontario law does provide mechanisms for a co-operative to change its corporate form, but this is a significantly more involved process than routine…
Read the full answer →Yes. Ontario co-operatives are incorporated and governed under their own dedicated statute, the Co-operative Corporations Act, rather than the Business…
Read the full answer →Ontario's co-operative structure generally allows a co-operative to issue investment shares as a way to raise capital, separate from membership shares,…
Read the full answer →What happens to a departing member's investment shares depends primarily on the specific co-operative's bylaws, since Ontario's co-operative structure…
Read the full answer →Ontario co-operatives operate on the principle of one-member-one-vote, meaning that at a members' meeting each member generally gets a single vote on…
Read the full answer →A patronage dividend (sometimes called a patronage return) is a distribution of an Ontario co-operative's surplus to its members based on how much…
Read the full answer →A co-tenancy clause ties a retail tenant's obligations, or rights, under the lease to whether certain other tenants, usually a major anchor store or a…
Read the full answer →Commercial general liability (CGL) insurance is designed to cover claims that your business's operations caused bodily injury or property damage to…
Read the full answer →In important ways, yes — Ontario commercial landlords have significantly broader self-help remedies than residential landlords, who generally must go…
Read the full answer →Not unless the lease itself allows it. Base rent for a commercial lease is fixed for the agreed term unless the lease contains a specific provision…
Read the full answer →Most Ontario commercial leases require the tenant to carry commercial general liability insurance, covering claims for bodily injury or property damage…
Read the full answer →There's no standard, protective default allocation of repair obligations the way there is under residential tenancies law — in a commercial lease,…
Read the full answer →Common area maintenance charges, often called CAM charges, are a tenant's share of the landlord's costs to operate and maintain the shared parts of a…
Read the full answer →If you hold a registered trademark and another business starts using a confusingly similar name, logo, or slogan for related goods or services, you…
Read the full answer →In Ontario, an employer cannot make fundamental changes to an employee's job terms without consent. If they do — and the change is significant enough —…
Read the full answer →A constructive trust is an equitable remedy that courts impose to prevent unjust enrichment. When an Ontario director breaches their fiduciary duty and…
Read the full answer →The difference is about who the co-operative exists to serve. A consumer co-operative is organized so its members can purchase goods or services from…
Read the full answer →No. Continuance doesn't create a new legal entity and doesn't cancel or interrupt the corporation's existing contracts. The whole point of continuance…
Read the full answer →In principle, yes — the Business Corporations Act permits an Ontario corporation to apply to continue under the law of a jurisdiction outside Canada,…
Read the full answer →Yes. The Business Corporations Act (Ontario) allows an Ontario corporation to apply to continue as a corporation under the law of another Canadian…
Read the full answer →Yes. The process of moving a corporation from one incorporating jurisdiction to another is called "continuance." An Ontario corporation can continue…
Read the full answer →When a commercial contract contains ambiguous language, Ontario courts follow established principles of contract interpretation to determine what the…
Read the full answer →In Ontario, you can generally terminate a business contract for cause when the other party commits a material breach — one that goes to the root of the…
Read the full answer →A control agreement is an arrangement among a corporation (the debtor), a lender, and the securities intermediary that holds the corporation's…
Read the full answer →Copyright arises automatically under the Copyright Act the moment an original work is created and fixed in some tangible form — writing, code,…
Read the full answer →Under the Copyright Act, the default rule turns on the nature of the relationship, not who paid for the work. When an employee creates work in the…
Read the full answer →Dissent rights under the OBCA are not triggered by ordinary business decisions or day-to-day management choices a shareholder might disagree with —…
Read the full answer →"Domestication" and "continuance" describe essentially the same underlying idea — a corporation changing which jurisdiction's law governs it while…
Read the full answer →Changing an Ontario corporation's legal name requires amending the articles of incorporation through the Ontario Business Registry. This is called…
Read the full answer →Yes — and it is one of the most important steps to take immediately after incorporating. A corporation is a separate legal entity, and that separation…
Read the full answer →Yes. Unlike individuals (who always have a December 31 tax year), a corporation can choose any month-end as its fiscal year end when it first files a…
Read the full answer →When a corporation becomes insolvent, directors face heightened scrutiny of decisions made in the period leading up to and after insolvency. Several…
Read the full answer →Yes. Under the common law doctrine of vicarious liability, a corporation is generally responsible for wrongful acts committed by its employees in the…
Read the full answer →Potentially, yes. When a corporation carries on business under a name other than its exact corporate legal name, it must register that business name…
Read the full answer →The government filing fees for federal and Ontario incorporation are broadly comparable for a basic incorporation, though the amounts differ and both…
Read the full answer →Like most civil litigation in Ontario, oppression claims generally follow the loser-pays principle for legal costs — if a shareholder brings an…
Read the full answer →An Ontario corporation seeking a plan of arrangement applies to the Superior Court of Justice for an order approving it under the Business Corporations…
Read the full answer →Yes. Alongside voluntary dissolution, where shareholders choose to wind up and file articles of dissolution, and administrative dissolution, where the…
Read the full answer →Yes — removing a director is one of the remedies available to a court under the OBCA's oppression provisions when it finds that a director's conduct,…
Read the full answer →An "ineligible individual" is a Canada Revenue Agency concept under the Income Tax Act that generally captures someone who has been convicted of a…
Read the full answer →Dissolution doesn't automatically wipe out a corporation's debts, and creditors aren't necessarily out of luck just because the corporation no longer…
Read the full answer →Cross-collateralization is a structuring choice where a lender extending a second loan to a corporation it already lends to arranges for its existing…
Read the full answer →Under PIPEDA, an individual generally has the right to ask your business what personal information you hold about them, how it's being used, and who it…
Read the full answer →Cyber liability insurance is worth serious consideration for any Ontario business that stores customer data online, since it is designed to cover the…
Read the full answer →A 50/50 ownership structure — where two shareholders each hold half the company — creates an inherent risk of deadlock. If the two shareholders…
Read the full answer →A debenture is a debt instrument that historically evidenced a corporation's borrowing and often carried the security language creating fixed and…
Read the full answer →The process starts before any lawsuit is filed: the shareholder must give the corporation's directors reasonable notice of their intention to apply to…
Read the full answer →A derivative action is brought by one or more shareholders on behalf of the corporation itself, to recover for harm the corporation suffered, typically…
Read the full answer →A non-disclosure agreement (NDA) is a standalone contract whose sole or primary purpose is to protect confidential information. A confidentiality…
Read the full answer →The shareholder rights framework under the Canada Business Corporations Act and the Ontario Business Corporations Act is broadly similar for private…
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