A hiring offer overseas forced a Mississauga company to fix its share structure

The situation

The letter that started it was an offer letter, but not the kind most people expect to trigger a call to a corporate lawyer. It was the draft offer Kerem's company intended to send to Ramon, a candidate the board had settled on to become the company's first outside vice president of operations, complete with a proposed slice of equity as part of his compensation. Before that letter could go out, Kerem's accountant looked at the company's share register and told him, bluntly, that it was not ready for a new shareholder.

Kerem had started the business a decade earlier as a small operation making custom parts for packaging equipment, building it up from a background as a factory technician who understood the machines better than most of the people selling them. The company had grown steadily into a firm with revenue in the mid six figures, supplying several manufacturers across the region. Two years before the offer letter, Kerem had relocated overseas for family reasons and had been running the company remotely ever since, dialing into weekly calls with his small management team and flying back to Mississauga only a few times a year.

His wife, Analyn, a hairdresser by trade who had never held a formal role in the business, had been listed as a fifty percent shareholder since incorporation, mostly on the accountant's early advice for tax planning. She had no involvement in day-to-day decisions and no interest in acquiring any, but her shares carried full voting rights identical to Kerem's, meaning that on paper she had equal say over every corporate decision, including who else could become a shareholder.

Adding Ramon as a shareholder against that backdrop raised an obvious problem: a new executive with operational equity would either need Analyn's shares diluted or restructured, or the company would be handing meaningful voting power to three people with very different relationships to the business, one of them living on another continent and directing everything by video call.

When Kerem first raised the issue with us, his instinct was to simply ask Analyn to sign over some of her shares to make room for Ramon. Analyn, for her part, was uneasy about giving up any of the interest she had held since the company's earliest days, even though she had no wish to be involved in running it. The tension was less about money than about what her shares represented after a decade of watching the business grow from the sidelines, and any fix needed to respect that rather than treat her stake as a convenient pool to draw from.

Why this was harder than it looked

On the surface, this looked like a straightforward fix: create a new class of shares for Analyn that paid dividends but carried no vote, convert her existing shares into it, and issue Ramon his equity out of a separate class tied to his role. In practice, several things made it more complicated than that description suggests.

The first complication was Kerem's location. Every signature, every corporate resolution, and every conversation about the restructuring had to happen across a time difference that left only a narrow window each day when Kerem, Analyn, and our office could all reasonably be reached at once. Documents that would normally be signed in person in a boardroom had to be executed electronically, with careful attention to whether each signature requirement could actually be satisfied remotely under the company's own governing documents and Ontario's corporate rules.

The second complication was Analyn's shares themselves. Converting an existing shareholder's shares into a new class is not a simple relabeling exercise. It required amending the company's articles to create the new class, obtaining a formal shareholder resolution approving the change, and confirming that the conversion did not trigger unintended tax consequences for Analyn given that she had held her original shares since the company's founding. Because she and Kerem were not arm's length, the transaction also needed to be documented carefully enough to withstand scrutiny if it were ever questioned later, whether by a tax authority or by the couple's own estate planning down the road.

The third complication was Ramon's own expectations. His offer had been discussed informally in terms of a straightforward equity percentage, but once the new class structure was in place, his actual entitlement needed to be expressed in terms that matched the new arrangement rather than the old one-class structure everyone had been picturing when the number was first floated. That meant going back to the board with a revised proposal before the offer letter could finally go out, adding weeks to a hire the company had hoped to close quickly.

A fourth, quieter complication ran through all of this: none of it could be resolved with a single meeting. Ontario corporate rules allow a great deal of flexibility in how a company structures its share classes, but that flexibility only helps if the underlying paperwork, the articles, the resolutions, the register, is accurate to begin with. Kerem's company had been operating for years on a share register that had not been touched since incorporation, and reconciling it with what everyone now needed took longer than either Kerem or Ramon expected going in.

What we did

1. Reviewed the existing share structure and articles before drafting anything. We confirmed exactly what rights Analyn's original shares carried, what the company's articles currently permitted, and what would need to change to create a new class, so the restructuring plan was built on an accurate picture rather than assumptions carried over from the original incorporation. That review turned up a provision never updated after an early amendment, which meant confirming the company's actual legal position took longer than expected.
2. Designed a dividend-only, non-voting class specifically for Analyn's position. Because she had no role in management and no interest in one, we structured a share class that preserved her full economic interest in the company's value and any dividends declared, while removing voting rights that had never reflected her actual involvement, protecting Kerem's ability to make operational decisions without needing her sign-off on routine matters.
3. Prepared articles of amendment and the shareholder resolutions needed to approve them. Creating a new class requires formally amending the corporation's articles and obtaining shareholder approval for the change, so we drafted both documents and walked Kerem and Analyn through what each one meant before either of them signed anything. We also confirmed which approvals needed the higher voting threshold Ontario's corporate rules require for this kind of change, since getting that threshold wrong would have meant redoing the filing after the fact.
4. Coordinated signing across the time difference. With Kerem overseas, we scheduled document execution around the narrow overlap in working hours, used secure electronic signing for every document that permitted it, and confirmed in advance which resolutions still required an original signature so nothing had to be redone later. We built a signing calendar mapping each document to the earliest window it could realistically be executed in both time zones, avoiding the delay of discovering midway through that a document needed Kerem's original signature after all.
5. Converted Analyn's existing shares into the new class and confirmed the tax treatment. We worked with the company's accountant to structure the conversion so it did not trigger an unintended taxable disposition, documenting the transaction clearly given that Kerem and Analyn were not dealing with each other at arm's length. Because the shares had been held since incorporation, we also confirmed how the conversion would read on a future sale, so the paperwork would hold up if a buyer's lawyers ever asked about it.
6. Created a separate class for Ramon's equity tied to his role. Rather than issuing Ramon shares from the same class as the founders, we set up a distinct class carrying terms appropriate to an incoming executive, including vesting tied to his continued employment, so his equity would not automatically follow him if he left the company early.
7. Revised the offer letter to match the new structure. Once the classes were in place, we worked with Kerem to restate Ramon's equity offer in terms that accurately reflected what he would actually receive, avoiding a mismatch between what had been discussed informally and what the final documents provided. We also flagged the clauses Ramon's own advisor would likely focus on, so Kerem could anticipate questions about vesting and voting rights rather than fielding them for the first time after the offer had gone out.
8. Updated the corporate records and confirmed the closing package. We updated the share register, minute book, and corporate records to reflect the new structure, and provided Kerem with a clean summary he could keep on hand for future financing or hiring decisions without repeating this process from scratch. That summary set out each class's rights side by side in plain language, so Kerem would not need the underlying articles re-explained to him the next time an investor or hire asked how ownership was structured.

The outcome

The restructuring closed a few weeks later than originally hoped, but it closed cleanly. Ramon received his offer letter with equity terms that matched the actual share structure, accepted the role, and joined as the company's first outside executive hire. Analyn's economic interest in the company was fully preserved through her new dividend-paying shares, while voting control stayed exactly where Kerem needed it: with the person actually running the business day to day.

The delay itself cost the company little beyond a few extra weeks of negotiation, a reasonable trade given what the alternative would have looked like. Handing Ramon voting shares directly, or leaving Analyn's full voting rights in place alongside his, would have created a governance structure with three voices of unequal involvement and no clear mechanism for resolving disagreements, a problem that tends to surface only once it is too late to fix cheaply.

Working remotely added friction throughout, but nothing that could not be managed with enough lead time and attention to which documents genuinely required original signatures. Kerem later said the biggest surprise was not the legal complexity but realizing how much of the company's early paperwork had been built on assumptions nobody had revisited since the day it was filed. The new structure gave him a cap table he could explain to a future investor or a second hire without qualification, which was, in the end, the point of doing it properly rather than quickly.

For Analyn, the outcome mattered in a different way. She kept her full economic interest and, for the first time, a written explanation of exactly what her shares entitled her to, something the original one-class structure had never spelled out beyond a percentage on a certificate. Ramon, meanwhile, started the role with a clear sense of what his equity would be worth if the company grew and what would happen to it if he left, terms that would have been far murkier had he joined under the original structure everyone had first assumed would simply be extended to him.

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