600 plain-language Q&As about corporate. Browse below, or search the whole library.
A holding company (or "holdco") is a corporation whose primary purpose is to hold shares in another corporation rather than carry on an active business…
Read the full answer →Not automatically. Each corporation in a corporate group — holding company and operating subsidiaries — is a separate legal person. Being a director of…
Read the full answer →If a commercial tenant stays in possession after the lease term ends without signing a new lease or renewal, this is generally treated as…
Read the full answer →There is no single provincial permit that covers all home-based businesses in Ontario; what you actually need depends on your municipality's rules and…
Read the full answer →It depends on whether your specific home-based business activity fits within what your municipality's zoning bylaw already permits as a home-occupation…
Read the full answer →Generally, yes, but the process is different from a landlord evicting a tenant. A housing co-operative member typically occupies their unit under an…
Read the full answer →The cost of incorporating in Ontario has two components: government filing fees and professional fees if you use a lawyer. The Ontario government…
Read the full answer →Under the Ontario Business Corporations Act, the directors of a corporation set the price at which new shares are issued. The OBCA requires that…
Read the full answer →Adding a new shareholder to an Ontario corporation can happen in two ways: the corporation issues new shares to the incoming shareholder (a primary…
Read the full answer →To incorporate under the Ontario Business Corporations Act (OBCA), you file Articles of Incorporation with the Ontario Ministry of Public and Business…
Read the full answer →As an owner-manager of an Ontario corporation, you have two main options for taking money out of the corporation: salary and dividends. Many owners use…
Read the full answer →An Ontario lender searches the PPSA registry primarily by the corporation's exact legal name, which is why confirming that name precisely against the…
Read the full answer →Your HST obligations depend on your revenue, not your legal structure. Whether you operate as a sole proprietor or a corporation, you must register for…
Read the full answer →Ontario's Human Rights Code prohibits discrimination based on protected grounds — including disability, family status, creed, age, sex, gender…
Read the full answer →Many entrepreneurs start operating as sole proprietors, build some revenue, and then incorporate later. There is no law requiring you to incorporate…
Read the full answer →This is one of the first decisions to make when incorporating, and the answer depends on your business plans. An Ontario provincial corporation is…
Read the full answer →The government filing fee for incorporating an Ontario corporation varies depending on whether you apply online through the Ontario Business Registry…
Read the full answer →The distinction between an employee and an independent contractor matters enormously in Ontario — it determines whether the worker is entitled to ESA…
Read the full answer →No. The Ontario Business Corporations Act does not require private corporations to have independent directors. Independence requirements — such as…
Read the full answer →Yes, and this is one of the most practically important provisions a minority shareholder can negotiate. Under the Ontario Business Corporations Act,…
Read the full answer →Yes, it matters significantly. Courts in Canada distinguish between inside directors and outside directors when assessing whether the due diligence…
Read the full answer →Most commercial leases in Ontario require the tenant to carry specific insurance as a condition of the lease itself, with the landlord typically…
Read the full answer →Intellectual property, such as a registered trademark, a copyright, or a patent held by the corporation, is corporate property just like any tangible…
Read the full answer →An intercreditor agreement is a contract between two or more lenders who both have security interests in the same corporation's assets, setting out…
Read the full answer →Yes. Under the Copyright Act, a freelance contractor who creates work for your business — a logo, website, software, photography, written content —…
Read the full answer →An IP assignment agreement is a contract that transfers ownership of intellectual property — copyright, trademark rights, or an invention — from the…
Read the full answer →Federal incorporation is often preferred by businesses that plan to raise investment from institutional or angel investors, particularly if that…
Read the full answer →Where a corporation's shares are actually held by another corporation, a holding company, or a similar entity rather than by an individual directly,…
Read the full answer →Both Ontario's Business Corporations Act and the equivalent federal corporate statute use a similar approach: an individual becomes an individual with…
Read the full answer →Yes. One of the main purposes of the individuals-with-significant-control register requirement under the Business Corporations Act is to make this…
Read the full answer →The Business Corporations Act treats the transparency register as a real compliance obligation, not a paperwork suggestion, and makes it an offence to…
Read the full answer →No. In Ontario, the individuals-with-significant-control register is kept privately by the corporation itself, as part of its own corporate records,…
Read the full answer →The Business Corporations Act sets out specific categories of information the register needs to capture for each individual with significant control,…
Read the full answer →The individuals-with-significant-control register isn't something an Ontario corporation can set up once and forget. The Business Corporations Act…
Read the full answer →The individuals-with-significant-control register requirement under the Business Corporations Act is aimed at private corporations, not public ones. If…
Read the full answer →Yes. The individuals-with-significant-control rules under the Business Corporations Act specifically account for situations where control isn't held by…
Read the full answer →A joint venture isn't a defined legal structure in Ontario the way a partnership or corporation is — it's whatever the parties' contract says it is,…
Read the full answer →Yes, but it takes careful, deliberate structuring, not just calling the arrangement a joint venture instead of a partnership. Because Ontario's…
Read the full answer →A partnership is a defined legal relationship under Ontario's Partnerships Act, arising from persons carrying on business in common with a view to…
Read the full answer →Generally, no. A judgment creditor is someone who has sued a corporation, obtained a court judgment, and can then have the sheriff issue a writ of…
Read the full answer →Terminating an employee for just cause in Ontario means dismissing them without any notice or pay in lieu of notice, because their conduct is serious…
Read the full answer →Almost certainly, yes, though the answer ultimately comes from your specific lease rather than a general rule. The great majority of Ontario commercial…
Read the full answer →Generally, a landlord's claim for unpaid rent is not automatically ranked ahead of a lender's properly registered security interest under Ontario's…
Read the full answer →It depends on exactly how your lease's assignment clause is worded, which is really the crux of this question. If the lease requires the landlord's…
Read the full answer →Ontario's Employment Standards Act, 2000 permits temporary layoffs under specific conditions without the layoff being treated as a termination — but…
Read the full answer →Assignment and subletting both let a tenant bring in someone else to occupy leased space, but they work quite differently. In an assignment, the…
Read the full answer →It depends entirely on what the lease says, since there's no single default answer that applies to every commercial lease in Ontario. Leasehold…
Read the full answer →A security interest that attaches but is never registered still exists between the lender and the borrower — the borrower generally can't argue the…
Read the full answer →A letter of intent, sometimes called a term sheet, is a document landlords and prospective tenants use to outline the key proposed terms of a lease,…
Read the full answer →As a sole proprietor, your personal liability is unlimited. If a client sues your business and wins a judgment larger than your business assets, they…
Read the full answer →A licence-back arrangement is a two-step structure where an operating business first assigns ownership of its intellectual property — trademarks,…
Read the full answer →Yes, both food and alcohol involve their own distinct regulatory requirements in Ontario, separate from general business or municipal licensing. Any…
Read the full answer →Importing and exporting are regulated federally, not provincially, so the licences and registrations involved come from the federal government rather…
Read the full answer →Yes — licensing is exactly the mechanism that lets a franchisee or distributor use your trademark while you keep both ownership and meaningful control…
Read the full answer →Assigning IP means permanently transferring ownership — once you assign your trademark, copyright, or patent rights to another party, you no longer own…
Read the full answer →Piercing the corporate veil — holding a director or shareholder personally responsible for the corporation's debts or actions — is an exceptional…
Read the full answer →Limitation of liability clauses — provisions that cap the amount one party can recover from the other — are generally enforceable in Ontario between…
Read the full answer →Limitation periods for director liability vary depending on the type of claim. Under Ontario's Limitations Act, the basic two-year limitation period…
Read the full answer →A limited liability partnership, or LLP, is a partnership structure under Ontario's Partnerships Act that gives partners protection from personal…
Read the full answer →Yes. Under Ontario's Limited Partnerships Act, a limited partner's liability is capped at their investment only as long as they stay out of controlling…
Read the full answer →Not without risk. The whole basis of a limited partner's capped liability under Ontario's Limited Partnerships Act is that they stay in the position of…
Read the full answer →Ontario's Limited Partnerships Act requires a declaration to be filed to register the limited partnership, but it doesn't necessarily require the…
Read the full answer →Ontario corporations that fail to file required annual returns with the Ontario Business Registry will eventually be cancelled (administratively…
Read the full answer →A material adverse change (MAC) clause — also called a material adverse effect (MAE) clause — in an Ontario business purchase agreement allows the…
Read the full answer →Minority shareholders in an Ontario private corporation have several protections under the Ontario Business Corporations Act, even without a…
Read the full answer →Ontario corporations incorporated under the Business Corporations Act are required to maintain a minute book — a set of corporate records — at their…
Read the full answer →Yes, maintaining a minute book is a legal requirement for Ontario corporations under the Business Corporations Act. The minute book is the…
Read the full answer →Generally, no — most Ontario professional corporations are restricted to voting shareholders who are all licensed members of the same profession, since…
Read the full answer →Yes. Ontario's Personal Property Security Act doesn't prevent a corporation from granting security interests in the same asset to more than one lender…
Read the full answer →Yes, this is a common and generally permitted structure. Multiple licensed members of the same profession can each hold shares in a single professional…
Read the full answer →Ontario corporations can create multiple classes of shares, each with different rights, and there are several legitimate reasons to do so. The most…
Read the full answer →Possibly — municipal business licensing in Ontario is set by each individual municipality rather than one province-wide law, so whether you need one,…
Read the full answer →A non-disclosure agreement protecting a trade secret should start by clearly defining what counts as "confidential information" — broadly enough to…
Read the full answer →A negative pledge clause is a promise a corporation makes in a loan agreement not to grant a security interest over its assets, or over specified…
Read the full answer →Yes, and increasingly tenants do ask for this, though it has to be negotiated into the lease upfront rather than assumed or requested later once…
Read the full answer →Yes, and you generally need to, because Ontario law doesn't give a commercial tenant an automatic right to renew a lease once the term ends — a renewal…
Read the full answer →Yes. A nominee director — someone placed on a board to represent the interests of a particular shareholder, lender, or appointing party — is a director…
Read the full answer →Technically, another person can serve as a director of your corporation, but Ontario has progressively reduced the privacy benefit. Ontario…
Read the full answer →No, at least not legitimately. The whole purpose of the individuals-with-significant-control regime under the Business Corporations Act is to prevent…
Read the full answer →When you sell a business in Ontario, it is standard practice for the buyer to require the seller to sign a non-competition agreement. Unlike employment…
Read the full answer →Yes, shareholder agreements in Ontario can include non-competition obligations, but their enforceability depends on whether they are reasonable in…
Read the full answer →Generally, no. Ontario's professional-corporation rules require that all shares of a law corporation, voting and non-voting alike, be held only by…
Read the full answer →Generally, the oppression remedy is meant to address harm to the specific complainant who brings the claim, so relief is usually tailored to that…
Read the full answer →Where a governing body permits a non-professional shareholder at all — commonly a family member holding shares for tax or estate-planning reasons —…
Read the full answer →Generally, yes, for two related reasons. First, since 2021, the Employment Standards Act, 2000 has banned non-compete agreements for most employees…
Read the full answer →Yes, generally, through a properly drafted non-solicitation clause in the employment contract. This type of clause specifically restricts a departing…
Read the full answer →A non-solicitation clause restricts a departing employee from actively going after the former employer's clients, customers, or staff for a defined…
Read the full answer →Non-voting shares are a class of shares that do not carry the right to vote at shareholder meetings. Holders of non-voting shares have an economic…
Read the full answer →Yes. ONCA requires every Ontario not-for-profit corporation to hold an annual meeting of members, at which members typically receive the corporation's…
Read the full answer →Largely, yes. Directors of an Ontario not-for-profit corporation owe the same core duties as directors of a business corporation — a fiduciary duty to…
Read the full answer →What happens to leftover assets depends heavily on what kind of not-for-profit corporation is dissolving. For a non-soliciting corporation with no…
Read the full answer →Yes. ONCA allows an Ontario not-for-profit corporation to create multiple classes of members, and each class can have different rights — including…
Read the full answer →Yes. ONCA permits an Ontario not-for-profit corporation to hold members' meetings entirely electronically, or to allow members to participate…
Read the full answer →A not-for-profit corporation is an entity organized for a purpose other than profit — it can be a sports club, neighbourhood association, arts…
Read the full answer →When you incorporate in Ontario, the government can automatically assign a number to your corporation — for example, "1234567 Ontario Inc." — or you…
Read the full answer →Both federal and Ontario provincial incorporations can result in a numbered corporation. If you file Articles of Incorporation without specifying a…
Read the full answer →Both the Ontario Business Corporations Act and the Canada Business Corporations Act are modern statutes with similar approaches to share structure, so…
Read the full answer →Yes. Officers of a corporation who personally participate in, direct, authorize, or acquiesce in fraudulent conduct can face both civil and criminal…
Read the full answer →Under the Ontario Business Corporations Act, officers owe the corporation the same core duties as directors — the duty to act honestly and in good…
Read the full answer →ONCA lets two or more Ontario not-for-profit corporations amalgamate and continue on as a single corporation, similar in structure to how business…
Read the full answer →Links go to the official consolidated text. Legislation changes — confirm you are reading the current version.
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