600 plain-language Q&As about corporate. Browse below, or search the whole library.
When you sign a personal guarantee on a corporation's loan, you are agreeing to be personally responsible for the corporation's debt if the corporation…
Read the full answer →One of the main reasons to incorporate is limited liability — shareholders are generally not personally responsible for the corporation's debts.…
Read the full answer →Courts in Ontario treat piercing the corporate veil as a remedy of last resort — they generally respect the separate legal personality of a…
Read the full answer →Yes. PIPEDA is a federal law, but it applies to the handling of personal information by most Ontario businesses in the course of commercial activity…
Read the full answer →PIPEDA applies to small Ontario businesses too — there's no size, revenue, or employee-count exemption that carves smaller operations out of the…
Read the full answer →Under PIPEDA, personal information is defined broadly as information about an identifiable individual — meaning it can reasonably be linked back to a…
Read the full answer →An amalgamation combines two or more corporations into a single continuing corporation, following a specific procedure in the Business Corporations…
Read the full answer →A plan of arrangement is a court-supervised procedure under the Business Corporations Act (Ontario) that lets a corporation carry out a complex…
Read the full answer →For a purchase-money security interest to get its special super-priority over an earlier-registered general security interest, the PMSI holder…
Read the full answer →Not necessarily. Ontario's Personal Property Security Act generally treats different categories of collateral differently when it comes to the specific…
Read the full answer →The PPSA isn't limited to traditional loans. Ontario's Personal Property Security Act specifically extends to certain leases of goods, particularly…
Read the full answer →Attachment is the point at which a security interest becomes enforceable between the lender and the debtor — generally once there's a valid security…
Read the full answer →Ontario's Personal Property Security Act generally resolves priority disputes between competing security interests in the same collateral by looking at…
Read the full answer →A trustee in bankruptcy essentially steps into the position of representing the corporation's general unsecured creditors once the corporation becomes…
Read the full answer →Because Ontario's PPSA registry is indexed and searched primarily by the debtor's exact legal name, a registration that was accurate when filed can…
Read the full answer →When a secured party registers a financing statement under Ontario's Personal Property Security Act, it generally chooses the length of the…
Read the full answer →When two corporations amalgamate under the Business Corporations Act, the amalgamated corporation continues as a single entity carrying forward the…
Read the full answer →The PPSA registry is Ontario's public electronic database of registered financing statements, showing security interests that secured parties have…
Read the full answer →Goods that become attached to real property in a way that makes them fixtures create a genuine overlap between personal-property security law and…
Read the full answer →After a financing statement is registered in Ontario's PPSA registry, the registry generates a verification statement confirming exactly what was…
Read the full answer →Pre-emptive rights (also called anti-dilution rights or pre-emption rights) give existing shareholders the right to purchase their proportional share…
Read the full answer →You can sign a contract before incorporation, but you need to understand who is liable — and take the right steps afterward. A contract signed on…
Read the full answer →Preferred shares are a separate class of shares that carry different rights from common shares — typically, preferential treatment in one or more of…
Read the full answer →Ontario private sector employers are subject to federal privacy legislation — the Personal Information Protection and Electronic Documents Act (PIPEDA)…
Read the full answer →A probationary period is a trial period at the beginning of employment during which the employer can assess whether the employee is suitable for the…
Read the full answer →Product liability insurance covers claims that a product your business manufactured, distributed, or sold caused injury or property damage to someone…
Read the full answer →Most governing bodies require a professional corporation's certificate of authorization to be renewed on a regular basis, commonly annually, often…
Read the full answer →In practice, professional corporations in Ontario are almost always incorporated provincially under the Ontario Business Corporations Act rather than…
Read the full answer →Yes. Incorporating under the Business Corporations Act is only the first step. Before the corporation can actually carry on the regulated profession,…
Read the full answer →No. Incorporating as a professional corporation shields you from many of the ordinary risks of running a business — general contract debts, most…
Read the full answer →This depends on your specific governing body's rules rather than a single province-wide answer. Some regulators authorize the professional corporation…
Read the full answer →Yes, as a general rule. Ontario's professional-corporation regime requires the corporation's legal name to include the words "Professional…
Read the full answer →A professional corporation's name has to satisfy two layers of rules. First, the ordinary corporate-naming requirements apply, just as they would for…
Read the full answer →A professional corporation's certificate of authorization is generally tied to having an active, licensed professional in good standing responsible for…
Read the full answer →This is one of the harder scenarios professional corporations face, because shares generally can only be voted by licensed members of the profession,…
Read the full answer →It depends on what that other corporation does. A professional corporation's business is generally restricted to practising its licensed profession,…
Read the full answer →A suspension of the licensed shareholder is generally a serious problem for the corporation, not just for the individual, since the certificate of…
Read the full answer →Both are corporations under the same Business Corporations Act framework, and both give shareholders the general benefit of limited liability: a…
Read the full answer →Generally yes, subject to extra conditions on top of the ordinary corporate rules. The Business Corporations Act allows Ontario corporations to…
Read the full answer →Professional liability insurance, often called errors and omissions (E&O) insurance, covers claims that your business's advice, services, or…
Read the full answer →Registering a business name under Ontario's Business Names Act does not protect the name from being used by others. The provincial registry is a…
Read the full answer →A purchase-money security interest, or PMSI, is a specific type of security interest that arises when a lender or supplier finances a corporation's…
Read the full answer →Most Ontario business purchase agreements include purchase price adjustment mechanisms to ensure the buyer pays for the business's actual value at…
Read the full answer →A privately appointed receiver is appointed directly by a secured lender under the powers set out in its own security agreement, without first going to…
Read the full answer →Even after a corporation dissolves, its corporate records — the minute book, articles, by-laws, resolutions, and registers of directors, officers, and…
Read the full answer →Yes. The process is called continuance or redomiciliation. An Ontario corporation can apply to continue under the Canada Business Corporations Act…
Read the full answer →When an Ontario corporation continues into another province, it has to establish a registered office in that new jurisdiction, since every corporation…
Read the full answer →Under the Business Corporations Act (Ontario), every corporation must have a registered office — a physical address in Ontario where legal documents,…
Read the full answer →A properly perfected secured creditor generally continues to have a claim against its specific collateral even after the corporation goes bankrupt, and…
Read the full answer →Trademark registration in Canada is federal, done through CIPO (the Canadian Intellectual Property Office) under the Trademarks Act, regardless of…
Read the full answer →Registering a security interest under Ontario's Personal Property Security Act means filing a financing statement in the province's public electronic…
Read the full answer →The OBCA gives courts broad, flexible remedial powers once oppression is found, rather than limiting the court to one fixed outcome — the goal is to…
Read the full answer →A rent escalation clause sets out in advance how base rent will increase over the course of a multi-year commercial lease term, rather than leaving…
Read the full answer →In a business purchase agreement in Ontario, representations and warranties are factual statements that the seller makes about the business as at the…
Read the full answer →No. Ontario removed its director residency requirement effective July 5, 2021, under the Better for People, Smarter for Business Act, 2020. Before that…
Read the full answer →Enforcing non-competition clauses against former employees in Ontario became significantly harder in October 2021, when the Working for Workers Act,…
Read the full answer →Yes. Continuance isn't a one-way door. A corporation that previously continued out of Ontario into another jurisdiction can generally apply to continue…
Read the full answer →A right of first refusal (ROFR) is a contractual provision that requires a shareholder who wants to sell their shares to first offer them to the…
Read the full answer →Yes — many industries in Ontario are regulated by their own provincial, and sometimes federal, licensing bodies entirely separate from municipal…
Read the full answer →This is one of the more nuanced areas where provincial PPSA priority rules interact with federal insolvency law. A properly perfected secured lender…
Read the full answer →Seizing collateral is only one of several remedies available to a secured lender under Ontario's Personal Property Security Act once a corporation…
Read the full answer →In many cases, yes. Ontario's Personal Property Security Act generally allows a secured lender to exercise a self-help remedy and take possession of…
Read the full answer →A secured creditor holds a registered security interest under the Personal Property Security Act over specific collateral belonging to your corporation…
Read the full answer →Yes, and this is extremely common, particularly for small and mid-sized business lending. A lender can take a general security agreement over the…
Read the full answer →A security interest in accounts receivable gives a lender rights over the money a corporation is owed by its own customers, treating those receivables…
Read the full answer →Yes. A corporation's bank accounts are a form of intangible personal property under Ontario's Personal Property Security Act, and a lender can take a…
Read the full answer →Yes, and this is one of the situations Ontario's Personal Property Security Act is specifically built to handle well. A security agreement covering…
Read the full answer →Yes. One of the key features of Ontario's Personal Property Security Act is that a security agreement can extend to "after-acquired property," meaning…
Read the full answer →Yes. Shares a corporation holds in another company are a form of personal property, specifically investment property, and the corporation can pledge or…
Read the full answer →Generally, yes. If the corporation itself is sold through a share sale, the corporation's own legal identity doesn't change — the shares change hands,…
Read the full answer →Continuing to another province doesn't automatically wipe out a corporation's existing security registrations against its personal property, since the…
Read the full answer →Yes. Self-employed individuals — including sole proprietors — must pay both the employee and employer portions of Canada Pension Plan (CPP)…
Read the full answer →Yes, severance packages in Ontario are almost always negotiable. When an employer offers severance, the initial offer often reflects the statutory…
Read the full answer →When a Canadian private corporation redeems or repurchases shares from a shareholder, the tax treatment is not the same as a simple sale of shares on…
Read the full answer →Ontario corporations incorporated under the Business Corporations Act (OBCA) or federally under the Canada Business Corporations Act (CBCA) have…
Read the full answer →Under the Ontario Business Corporations Act, a corporation must maintain a share register recording the names and addresses of each shareholder and the…
Read the full answer →When you incorporate, you design the corporation's share structure by setting out the classes of shares and their rights in the articles of…
Read the full answer →Yes, Ontario corporations can authorize multiple classes of shares with different voting rights, provided the differences are clearly set out in the…
Read the full answer →Dilution occurs when a corporation issues new shares, which reduces the ownership percentage of existing shareholders even though the number of shares…
Read the full answer →Yes, Ontario private corporations can grant stock options to employees. A stock option gives the recipient the right to purchase shares in the…
Read the full answer →The Ontario Business Corporations Act requires every Ontario corporation to maintain a securities register at its registered office or at another…
Read the full answer →Yes, an Ontario corporation can acquire its own shares — either through a redemption (where the articles give the corporation the right to buy the…
Read the full answer →A share split (or stock split) occurs when a corporation divides its existing shares into a larger number of shares. For example, a two-for-one split…
Read the full answer →The share structure you set up on incorporation affects how you can plan for taxes, bring in investors, split ownership, and exit the business. Getting…
Read the full answer →Whether your Ontario business is sold as a share sale (the buyer purchases the shares of the corporation) or an asset sale (the buyer purchases the…
Read the full answer →A share subscription agreement is a contract between a corporation and a person (or entity) who is agreeing to purchase a specified number of shares at…
Read the full answer →Yes. Restricting share transfers is one of the most common and important features of an Ontario private corporation's shareholder agreement (and may…
Read the full answer →Share transfer restrictions can appear in the articles of incorporation, in a shareholder agreement, or in both — and each location has different legal…
Read the full answer →Valuing shares in a private Ontario corporation is more complex than valuing publicly traded shares, because there is no market price to look up.…
Read the full answer →Share vesting is a mechanism where a shareholder earns their full ownership over time or upon hitting certain milestones, rather than receiving all…
Read the full answer →Without a dispute resolution clause in a shareholder agreement, a deadlock between shareholders often has no clean internal solution. The parties are…
Read the full answer →A shareholders' agreement is a private contract among the shareholders of a corporation that governs their relationship, rights, and obligations. For a…
Read the full answer →When a new investor joins an Ontario private corporation, the existing shareholder agreement needs to be addressed. There are generally two approaches:…
Read the full answer →If you are the sole shareholder, a shareholder agreement is less urgent — though even then, a unanimous shareholder agreement (USA) can be used to…
Read the full answer →Articles of incorporation and a shareholder agreement are two distinct and complementary documents that together govern an Ontario corporation. The…
Read the full answer →Yes. Continuing into another jurisdiction is treated as a fundamental change under the Business Corporations Act, so it generally requires shareholders…
Read the full answer →A shareholder loan is money that flows between a corporation and its shareholder — either the shareholder lends money to the corporation, or the…
Read the full answer →Whether to contribute money to your Ontario corporation as a shareholder loan or as equity (by subscribing for shares) has both legal and tax…
Read the full answer →Generally, no. One of the most fundamental principles of corporate law is limited liability. When you invest in a corporation — whether an Ontario…
Read the full answer →The Business Corporations Act places an obligation on shareholders to respond, to the best of their knowledge, to a corporation's request for…
Read the full answer →Links go to the official consolidated text. Legislation changes — confirm you are reading the current version.
Send it to a Treadstone lawyer — free, answered in plain language.