600 plain-language Q&As about corporate. Browse below, or search the whole library.
Shareholders' rights under the Business Corporations Act (Ontario) depend partly on their class of shares, but several baseline rights apply broadly.…
Read the full answer →A subordination and postponement of claim is an agreement in which a shareholder who has also lent money to their own corporation agrees to rank their…
Read the full answer →Shares in an Ontario corporation can be held by a trustee on behalf of a beneficiary. This is common in estate planning (where shares are held by a…
Read the full answer →Shares and units are both forms of ownership interest in a business entity, but they arise in different legal structures with different legal, tax, and…
Read the full answer →It depends on what the third party is doing with the information. Under PIPEDA, sharing personal information with a service provider who is processing…
Read the full answer →A shelf company is a corporation that was incorporated but has never conducted business and has been "sitting on a shelf" waiting to be sold to someone…
Read the full answer →A shotgun clause (also called a buy-sell clause) is a dispute-resolution mechanism built into many shareholder agreements. It works as follows: one…
Read the full answer →An individual director does not automatically have authority to bind the corporation by signing a contract, simply by virtue of being a director.…
Read the full answer →Yes. The individuals-with-significant-control register requirement under the Business Corporations Act doesn't have an exemption for corporations with…
Read the full answer →A sole proprietor in Ontario must keep business records that support the income and expenses reported on their personal income tax return. These…
Read the full answer →Yes. A sole proprietorship can hire employees just like a corporation. Being incorporated is not a prerequisite for becoming an employer. Once you hire…
Read the full answer →Yes. You can incorporate at any point and transfer your sole proprietorship business into the new corporation. This is a common path — many businesses…
Read the full answer →A sole proprietorship has one owner. A partnership arises when two or more persons carry on business together with a view to profit — even without a…
Read the full answer →A sole proprietorship is the simplest business form: you and your business are legally the same person. All profits flow directly to your personal tax…
Read the full answer →Under ONCA, every Ontario not-for-profit corporation falls into one of two categories, and the difference changes what compliance looks like. A…
Read the full answer →A specific security agreement limits the collateral to a defined asset or category — for example, one piece of equipment, a vehicle, or a particular…
Read the full answer →Including your spouse as a shareholder — or structuring share classes so dividends can be directed to a spouse — is a common tax planning strategy, but…
Read the full answer →Yes. An Ontario corporation can split its business or assets into two separate corporations, most commonly through a plan of arrangement under the…
Read the full answer →Possibly, but it depends entirely on your profession's governing body, not on a single rule that applies to every professional corporation. Some…
Read the full answer →A squeeze-out, or going-private transaction, is a deal where a controlling shareholder (or a small group) eliminates the remaining minority…
Read the full answer →Many professionals in Ontario can incorporate, but under the same Business Corporations Act as any other corporation, subject to additional…
Read the full answer →A statutory arrangement earns its place in the corporate toolkit by doing something ordinary amalgamations and asset sales can't: bundling several…
Read the full answer →Ontario's Environmental Protection Act and similar provincial statutes impose strict liability for environmental offences but provide a due diligence…
Read the full answer →Stock option plans allow employees and service providers to purchase shares in a corporation at a fixed price (the exercise price) set at the time the…
Read the full answer →A subordination agreement is a contract between two lenders who both hold security interests in the same corporation's assets, in which one lender…
Read the full answer →The T3010 is the annual information return every registered charity must file with the Canada Revenue Agency, reporting on its activities, finances,…
Read the full answer →As a sole proprietor, all net business income is added to your other income and taxed at your personal marginal rate in the year it is earned — even if…
Read the full answer →A term loan is a fixed amount of money advanced to a corporation upfront, generally repaid according to a set schedule over a defined period, and used…
Read the full answer →When terminating an employee without cause in Ontario, you must provide either working notice or pay in lieu of notice (or a combination). The minimum…
Read the full answer →Yes, in certain circumstances. A third party — a customer, supplier, employee, or member of the public — can bring a claim directly against a director…
Read the full answer →Yes, there's generally a limited window during which former shareholders, directors, or other interested parties can act, whether by reviving the…
Read the full answer →The Business Corporations Act does allow a dissolved Ontario corporation to apply to the Director to be revived, restoring its legal existence as if it…
Read the full answer →A trade secret is confidential business information that has value because it is not generally known — a customer list, a formula, a manufacturing…
Read the full answer →A registered Canadian trademark lasts for an initial term of 10 years from the registration date, but unlike a patent or copyright, it is not limited…
Read the full answer →These are three separate federal regimes protecting different things, and an Ontario business can hold all three at once for different aspects of the…
Read the full answer →Yes. Under the Trademarks Act, a business name, a logo, and a slogan are each treated as potentially separate trademarks, and CIPO allows you to…
Read the full answer →Not in any meaningful practical sense while the corporation remains dissolved. Shares represent an ownership interest in a corporation, and once that…
Read the full answer →Under the Ontario Business Corporations Act, a corporation that acquires its own shares must cancel those shares immediately upon acquisition — they…
Read the full answer →It can, depending on the nature of the consignment. In ordinary commercial language, a consignment usually means goods delivered to a business to sell…
Read the full answer →It can, but a trust itself, like a corporation, can't be recorded as an individual with significant control — only a natural person can hold that…
Read the full answer →Ontario's electronic PPSA registry records the specific time a financing statement is filed, not just the calendar date, so two registrations made on…
Read the full answer →The two underlying not-for-profit corporations can amalgamate under ONCA, following the same corporate process described elsewhere — director and…
Read the full answer →Umbrella, or excess, liability insurance provides additional coverage above the limits of your existing policies, such as commercial general liability…
Read the full answer →Under the Ontario Business Corporations Act, a unanimous shareholder agreement (USA) is a specific type of shareholder agreement signed by all…
Read the full answer →A unanimous shareholder agreement (USA) is a specific type of agreement under the Business Corporations Act (Ontario) that all shareholders of a…
Read the full answer →An unpaid seller who sells goods to a corporation under a retention-of-title arrangement — keeping legal title until the price is paid in full — isn't…
Read the full answer →Generally, no, not without thinking carefully about consent first. Under PIPEDA, using personal information, including an email address collected for…
Read the full answer →Vendor take-back (VTB) financing is an arrangement where the seller of a business agrees to finance part of the purchase price themselves, rather than…
Read the full answer →A vertical short-form amalgamation is a simplified way for a parent corporation to amalgamate with one or more of its wholly-owned subsidiaries under…
Read the full answer →Ontario directors have several ongoing disclosure obligations rooted in statute and common law. The most prominent is the duty to disclose material…
Read the full answer →Yes, you can make changes to your Ontario corporation's articles after incorporation by filing Articles of Amendment with ServiceOntario. Common…
Read the full answer →Corporate by-laws are the internal rules that govern how your corporation operates day to day. They address things like how directors are elected and…
Read the full answer →Common shares are the standard form of equity ownership in a corporation. In an Ontario corporation, common shareholders are typically entitled to vote…
Read the full answer →Yes. Under the Ontario Business Corporations Act, directors may pass a resolution without holding a formal meeting if all directors consent to the…
Read the full answer →Corporate resolutions are formal written records of decisions made by the directors or shareholders of a corporation. They are the way a corporation…
Read the full answer →Oppression under the OBCA is not limited to conduct that is technically illegal — it covers a broader range of conduct a court finds to be oppressive,…
Read the full answer →Incorporating a business means creating a separate legal entity — a corporation — that is distinct from you as an individual. In Ontario, a corporation…
Read the full answer →A well-drafted Ontario shareholder agreement typically addresses several core areas. First, it defines share transfer restrictions — for example, a…
Read the full answer →Receiving your certificate of incorporation is only the beginning. There are several practical steps to take before your corporation is fully…
Read the full answer →An Ontario director who breaches their duties may face several consequences depending on the nature and severity of the breach. The corporation — or…
Read the full answer →When an Ontario shareholder dies without a shareholder agreement in place, their shares become part of their estate and pass according to their will…
Read the full answer →A Canadian-controlled private corporation (CCPC) is a specific tax classification under the federal Income Tax Act. To qualify, the corporation must be…
Read the full answer →A co-operative corporation is a corporation organized to serve its members' needs — as consumers, producers, or workers — rather than primarily to…
Read the full answer →A derivative action is a lawsuit brought by a shareholder or creditor on behalf of the corporation, not for their own personal benefit but to enforce a…
Read the full answer →A holding company (sometimes called a "Holdco") is a corporation that exists primarily to own shares or assets rather than to actively carry on a…
Read the full answer →A corporate minute book is the official record of your corporation's most important documents and decisions. Under the Ontario Business Corporations…
Read the full answer →A NUANS (Newly Upgraded Automated Name Search) report is a search of existing registered and reserved business names, trademarks, and corporate names…
Read the full answer →A numbered company is an Ontario corporation that uses its assigned corporate number as its legal name, for example "1234567 Ontario Inc." It has no…
Read the full answer →Yes — many licensed professionals in Ontario can incorporate through what is called a "professional corporation." Eligible professions include lawyers,…
Read the full answer →Every Ontario corporation must have a registered office address in Ontario. This is the official address where legal documents — including court…
Read the full answer →A shareholder agreement is a private contract among the owners of a corporation that governs how they relate to each other and to the company itself.…
Read the full answer →A sole proprietorship is the simplest form of business in Ontario. You and the business are the same legal entity — there is no separation between your…
Read the full answer →Yes, but only through a very specific legal mechanism: a Unanimous Shareholders Agreement, commonly called a USA. Under the Ontario Business…
Read the full answer →An annual return is a filing that every Ontario corporation must submit each year to confirm that its information on the Ontario Business Registry is…
Read the full answer →A corporation is a separate legal person created by law. When you incorporate in Ontario under the Business Corporations Act (OBCA) or federally under…
Read the full answer →Continuance is the legal process by which a corporation changes the statute under which it is governed without ceasing to exist. A corporation…
Read the full answer →Under the Business Corporations Act (Ontario), directors owe two fundamental duties to the corporation. The first is a fiduciary duty — the duty to act…
Read the full answer →Closing an Ontario corporation involves either voluntary dissolution under the Ontario Business Corporations Act or, in some cases, a more formal…
Read the full answer →An entire agreement clause (sometimes called an integration clause) states that the written contract represents the complete agreement between the…
Read the full answer →Extra-provincial registration in Ontario is the process by which a corporation incorporated outside of Ontario — whether federally under the CBCA or in…
Read the full answer →Goodwill is the value of a business beyond its tangible assets — customer relationships, reputation, brand, know-how, and the expectation of continued…
Read the full answer →An indemnification clause (sometimes called an indemnity) is a contractual promise by one party to compensate the other for certain losses, claims, or…
Read the full answer →A letter of intent (LOI) is a preliminary document that outlines the key terms of a proposed business transaction before the parties negotiate and sign…
Read the full answer →No, they are different filings. Federal corporations incorporated under the Canada Business Corporations Act file their annual return directly with…
Read the full answer →The oppression remedy is one of the most powerful tools in Ontario corporate law. Under the Ontario Business Corporations Act, a court may make any…
Read the full answer →Your share structure is the framework that describes the types of shares your corporation can issue and what rights each class carries. It is set out…
Read the full answer →The business judgment rule is a judicial principle that courts will not second-guess a board's decision simply because it turned out badly, provided…
Read the full answer →Under the Ontario Business Corporations Act, every director and officer must act honestly and in good faith with a view to the best interests of the…
Read the full answer →A fiduciary duty is a duty of loyalty. A director who owes a fiduciary duty to the corporation must put the corporation's interests ahead of their own…
Read the full answer →For a commercial contract to be enforceable in Ontario, it must satisfy a few core requirements. There must be a clear offer, acceptance of that offer,…
Read the full answer →The Ontario Business Corporations Act requires every Ontario corporation to maintain a registered corporate records office and to keep certain books…
Read the full answer →There is no single revenue trigger that tells you it is time to incorporate, but several signals commonly push entrepreneurs in that direction.…
Read the full answer →For most small businesses that operate exclusively in Ontario, a provincial Ontario incorporation under the Ontario Business Corporations Act is the…
Read the full answer →Ontario's Business Corporations Act includes a professional-corporation regime that many regulated professions use, but whether a specific profession…
Read the full answer →Directors and officers are two different roles inside a corporation, though the same person can hold both. Directors are elected by shareholders to…
Read the full answer →The individuals-with-significant-control register isn't a public document in Ontario — it's kept privately by the corporation, typically alongside its…
Read the full answer →An individual with significant control, often called an ISC, is a real person, not a corporation or trust itself, who meets one of several tests set…
Read the full answer →Because a general partnership isn't a separate legal entity, it can't technically own property in its own name the way a corporation can. Instead,…
Read the full answer →Under Ontario's Occupational Health and Safety Act (OHSA), employers are required to have a written policy addressing workplace harassment and…
Read the full answer →If you believe you were wrongfully dismissed in Ontario — meaning your employer terminated you without providing adequate notice or pay in lieu — you…
Read the full answer →Links go to the official consolidated text. Legislation changes — confirm you are reading the current version.
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