600 plain-language Q&As about corporate. Browse below, or search the whole library.
Under the Ontario Business Corporations Act, a director who has a material interest in a contract or transaction that the corporation is considering…
Read the full answer →Generally, no. The corporate opportunity doctrine is a branch of directors' fiduciary duties in Ontario. A director who learns of a business…
Read the full answer →Yes. The Ontario Business Corporations Act expressly permits a corporation to indemnify a director or officer against costs, charges, and expenses…
Read the full answer →Yes, in certain respects. Dissolution of an Ontario corporation does not automatically extinguish all pre-dissolution liabilities of directors. The…
Read the full answer →The core director liability framework is substantially similar under both the federal Canada Business Corporations Act and the Ontario Business…
Read the full answer →Yes, in certain circumstances. While the corporation is a separate legal person that can be liable for its own torts — negligence, nuisance, fraud, and…
Read the full answer →Yes. The Ontario Business Corporations Act restricts a corporation from paying out capital to shareholders — through share redemptions, share…
Read the full answer →Yes. This is one of the most practically significant personal liabilities a director can face. Under the federal Income Tax Act, directors of a…
Read the full answer →Yes. Under Ontario's Occupational Health and Safety Act, a director or officer of a corporation is personally liable for ensuring the corporation…
Read the full answer →Yes. Under the federal Excise Tax Act, directors of a corporation are jointly and severally liable with the corporation for unremitted HST (and GST)…
Read the full answer →Yes. Under Ontario's Pension Benefits Act, directors of an Ontario corporation that sponsors a registered pension plan can face personal liability for…
Read the full answer →Yes. The Ontario Business Corporations Act prohibits a corporation from declaring or paying a dividend if there are reasonable grounds to believe the…
Read the full answer →Yes. Under the Ontario Business Corporations Act, directors of an Ontario corporation are jointly and severally liable for up to six months of wages…
Read the full answer →Resigning as a director can limit future exposure, but it does not eliminate liability for obligations that arose while you were a director. For source…
Read the full answer →Yes. Ontario's Environmental Protection Act gives the Ministry of the Environment, Conservation and Parks broad powers to issue orders requiring the…
Read the full answer →Yes. Under the Employment Standards Act, 2000 (Ontario), directors of Ontario corporations can be personally liable for unpaid wages owed to employees.…
Read the full answer →Directors' and officers' (D&O) liability insurance is a specialized policy that protects individuals serving as directors and officers against personal…
Read the full answer →Generally, no. Ontario's Business Corporations Act attaches a specific list of personal liabilities to directors that do not automatically extend to…
Read the full answer →A disbursement quota is a minimum amount that federal law requires a registered charity to spend each year on its own charitable activities or on gifts…
Read the full answer →Yes. Once a corporation has fully repaid the loan a PPSA registration was securing, it's generally entitled to have that registration discharged,…
Read the full answer →Yes. The Business Corporations Act gives shareholders a right to dissent in connection with specific fundamental changes — including amalgamations,…
Read the full answer →No. Dissolving a corporation doesn't automatically cancel a lease or other ongoing contractual obligations the corporation had — those obligations…
Read the full answer →Dissolution and bankruptcy are very different outcomes, though both end a corporation's existence. Voluntary dissolution is a controlled, deliberate…
Read the full answer →These are related but distinct concepts, and the terminology trips a lot of business owners up. Dissolution is what happens to the corporation itself —…
Read the full answer →A corporation's bank account is corporate property like anything else it owns, so if a corporation is dissolved — including an administrative…
Read the full answer →When an Ontario corporation is dissolved, any property it still owned that wasn't distributed to shareholders or otherwise dealt with before…
Read the full answer →A corporation can, as a technical matter, be dissolved while it still owes money to the Canada Revenue Agency, but doing so doesn't make that debt…
Read the full answer →What happens depends heavily on whether the partners have a written partnership agreement addressing this situation. If they do, the agreement…
Read the full answer →Including a dividend policy in a shareholder agreement is optional but can prevent significant disputes down the road. By default under the Ontario…
Read the full answer →A shareholders' agreement is not legally required, but for any corporation with more than one owner it is one of the most important documents you can…
Read the full answer →No. You can legally operate a business in Ontario as a sole proprietor or as part of a partnership without ever incorporating. Incorporation is a…
Read the full answer →Outside directors face the same categories of potential personal liability as inside directors — including liability for unremitted source deductions,…
Read the full answer →Drag-along and tag-along rights are provisions in a shareholders' agreement that govern what happens when a controlling shareholder wants to sell the…
Read the full answer →Drag-along and tag-along rights are companion provisions commonly found in shareholder agreements, particularly where there is a majority and a…
Read the full answer →Due diligence is the investigation a buyer conducts to verify what they are actually purchasing. In Ontario business acquisitions, due diligence…
Read the full answer →The due diligence defence allows a director to escape personal liability — most commonly for unremitted source deductions or HST — by demonstrating…
Read the full answer →Environmental due diligence is critical in any Ontario asset purchase involving real property, manufacturing equipment, or operations that handle…
Read the full answer →As a corporation approaches insolvency or becomes insolvent, Ontario courts have recognized that the interests of creditors become increasingly central…
Read the full answer →An earn-out is a deal structure where a portion of the purchase price is paid after closing, contingent on the business hitting certain financial…
Read the full answer →Yes. Ontario's Electronic Commerce Act, 2000 generally gives electronic signatures the same legal validity as handwritten signatures for most…
Read the full answer →When a business is sold in Ontario, what happens to employees depends significantly on whether the deal is structured as a share purchase or an asset…
Read the full answer →Generally, yes. Under the Copyright Act, when an employee creates a work — including software code — in the course of their employment, the employer is…
Read the full answer →A well-drafted employment agreement in Ontario should address the role and responsibilities, compensation (base salary, bonus, commission structure),…
Read the full answer →Ontario's Employment Standards Act, 2000 (ESA) sets the floor for most employment terms in the province. Key minimums include: the provincial minimum…
Read the full answer →Whether it makes sense to incorporate and offer services through your corporation rather than as an employee depends on the nature of your work and…
Read the full answer →Once a corporation is dissolved, it no longer exists as a legal person, which creates a real practical problem for enforcing a contract it signed,…
Read the full answer →Once a corporation defaults, a secured lender under Ontario's Personal Property Security Act generally has several enforcement options, and they aren't…
Read the full answer →Yes, but only within the specific framework the Employment Standards Act, 2000 sets out for averaging agreements, not informally. An averaging…
Read the full answer →The Employment Standards Act, 2000 requires most Ontario employees to get an eating period of at least 30 minutes after every five consecutive hours of…
Read the full answer →Generally, no, not without meeting specific conditions under the Employment Standards Act, 2000. The ESA restricts employers from deducting wages for…
Read the full answer →The Employment Standards Act, 2000 requires Ontario employers to keep detailed records for each employee, including basic identifying and employment…
Read the full answer →Under the Employment Standards Act, 2000, most employees are "non-exempt," meaning the Act's overtime rules apply to them in the ordinary way once…
Read the full answer →Ontario's Employment Standards Act, 2000 sets a general minimum wage that applies to most employees, currently $17.60 an hour for the period running to…
Read the full answer →It depends on what being "on call" actually requires of the employee, which is the detail that gets missed most often. Under the Employment Standards…
Read the full answer →Under Ontario's Employment Standards Act, 2000, most employees are entitled to overtime pay once their hours worked in a week cross the threshold set…
Read the full answer →Yes, but only through a specific mechanism the Employment Standards Act, 2000 permits, not as a general employer discretion. Instead of paying overtime…
Read the full answer →Generally, yes. Under the Employment Standards Act, 2000, time an employee spends in training that the employer requires them to attend is generally…
Read the full answer →Yes. Ontario employers covered by the Employment Standards Act, 2000 are generally required to display the government's official poster explaining…
Read the full answer →Most employees covered by Ontario's Employment Standards Act, 2000 are entitled to take recognized public holidays off with public holiday pay,…
Read the full answer →Ontario employers are generally required to keep the employment records the Employment Standards Act, 2000 requires, such as hours worked, wage rates,…
Read the full answer →No, not simply because the employee is paid a salary. Being paid a fixed salary rather than an hourly wage doesn't, on its own, remove an employee's…
Read the full answer →Under the Employment Standards Act, 2000, vacation pay in Ontario is calculated as a percentage of the wages an employee earned during the applicable…
Read the full answer →Vacation time and vacation pay are related but legally distinct concepts under the Employment Standards Act, 2000. Vacation time is the actual time off…
Read the full answer →Generally, yes, but the Employment Standards Act, 2000 gives employees who work on a public holiday specific compensation rights in exchange. An…
Read the full answer →Escheat is the general legal idea that property reverts to the Crown when there's no one left with a legal right to claim it — historically associated…
Read the full answer →An estate freeze is a tax and succession planning strategy that "freezes" the current value of your business shares in your hands and shifts future…
Read the full answer →An estate freeze is a tax and estate planning strategy used in Ontario family corporations to cap the current owner's exposure to capital gains tax at…
Read the full answer →An exclusivity clause is a promise from the landlord that it won't lease other space in the same building or plaza to a business that directly competes…
Read the full answer →An exit provision is among the most important things to address in a shareholder agreement, and it's easiest to negotiate before anyone actually wants…
Read the full answer →Once a shareholder validly exercises dissent rights under the OBCA, the corporation is generally required to offer to pay for the dissenting shares at…
Read the full answer →A fairness opinion is an assessment, usually prepared by an independent financial advisor or valuator, stating whether the financial terms of a…
Read the full answer →It depends on which profession's rules apply. Ontario's professional-corporation regime generally requires voting shares to be held by licensed members…
Read the full answer →Federal corporations incorporated under the Canada Business Corporations Act must file an annual return with Corporations Canada each year. The annual…
Read the full answer →The answer depends on which jurisdictions are involved. A federal corporation (incorporated under the CBCA) and an Ontario provincial corporation…
Read the full answer →Directors of a federal corporation incorporated under the Canada Business Corporations Act carry legal obligations under both the CBCA and, to the…
Read the full answer →No. Dissolving your federal corporation with Corporations Canada does not automatically cancel your Ontario extra-provincial registration. These are…
Read the full answer →Under the Canada Business Corporations Act, a federal corporation may use an English form, a French form, or both forms of its name. It is not…
Read the full answer →Yes. A federal corporation incorporated under the Canada Business Corporations Act has the right to conduct business anywhere in Canada, but Ontario…
Read the full answer →Under the Canada Business Corporations Act, a federal corporation must have a registered office in Canada — it does not have to be in any specific…
Read the full answer →Both federal and Ontario provincial incorporations can typically be completed quickly, though processing times vary and can change based on demand and…
Read the full answer →For opening a business bank account in Canada, both federal and Ontario provincial corporations are treated equally by banks. Major Canadian banks will…
Read the full answer →Yes, in a practical sense. When you incorporate federally under the Canada Business Corporations Act, the NUANS name search covers all of Canada — so…
Read the full answer →Ontario businesses can incorporate under the Ontario Business Corporations Act (OBCA) or federally under the Canada Business Corporations Act (CBCA).…
Read the full answer →A financing statement is the document filed in Ontario's PPSA registry to register a security interest — it's a notice-style filing, not the security…
Read the full answer →A fixed charge attaches to a specific, identified asset — a piece of real property, specific equipment, or a particular contract right — and generally…
Read the full answer →A force majeure clause excuses one or both parties from performing their contract obligations when extraordinary events beyond their control make…
Read the full answer →Forfeiture to the Crown and bankruptcy are entirely different legal processes that deal with different problems. Forfeiture, under Ontario's Forfeited…
Read the full answer →Generally, no, not simply because the corporation has been dissolved. A corporation is a separate legal person from its directors, and that separation…
Read the full answer →Issuing shares correctly to founders at the time of incorporation sets the foundation for all future corporate governance and avoids expensive…
Read the full answer →Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 requires franchisors to provide prospective franchisees with a disclosure document at least…
Read the full answer →Yes, potentially. Canadian insolvency law includes protections designed to stop a struggling corporation from unfairly favouring one creditor over…
Read the full answer →If partners never put a written agreement in place, Ontario's Partnerships Act default rules fill the gap and govern the relationship instead —…
Read the full answer →The partnership relationship itself doesn't require any registration or filing to exist — a general partnership arises simply from the factual…
Read the full answer →Yes. Under Ontario's Partnerships Act, partners in a general partnership are jointly and severally liable for the partnership's debts and for the acts…
Read the full answer →A general security agreement, often called a GSA, is a single contract in which your corporation grants a lender a security interest over essentially…
Read the full answer →A governing law clause specifies which province's or country's law applies to interpret and enforce the contract. A dispute resolution clause says…
Read the full answer →Yes — that's the entire point of continuance. Once an Ontario corporation continues into another province, it stops being governed by the Business…
Read the full answer →Gross rent is a single, all-inclusive figure the tenant pays that's meant to cover the base rent along with most of the landlord's underlying costs of…
Read the full answer →A guarantee is a promise made by a third party — often a director or shareholder of a borrowing corporation — to pay the corporation's debt personally…
Read the full answer →An operating company is the corporation that actually conducts the business — signing contracts with clients, employing staff, generating revenue, and…
Read the full answer →Links go to the official consolidated text. Legislation changes — confirm you are reading the current version.
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