To run your own business, you need to be able to wear many hats. Customer service, sales, marketing, maybe even human resources — the list goes on. Even if you can take all this in your stride, you may feel overwhelmed at the prospect of handling complex legal tasks too. Instead of stressing yourself out by trying to do everything, give yourself a break and delegate the hard work to a team of legal professionals.
We’ll run through some of the most important legal services for corporations and what to expect from them, with a focus on Ontario (Jeffrey Murray Law is based in Belleville, Ontario). These include incorporations, amalgamations, dissolutions, and annual corporate maintenance.
For many people, starting a business is one of the most empowering and exciting decisions of their life. But if you want to incorporate the correct way, it can be a complicated process that involves a lot of administration and knowledge of tax, business, and legal services.
In Canada, the process goes as follows:
- Choose a corporate name. If it’s a word name (letters and symbols), it must be approved by the Ministry.
- Create articles of incorporation. You must choose between a pre-packaged incorporation for smaller businesses or a custom incorporation for larger, more complex companies.
- Choose a registered office address and board of directors. This includes ensuring your directors are eligible.
- Submit your application. This can be done online.
At first glance, these tasks may seem easy enough. But even something as simple as choosing a name involves crucial decisions that require some legal knowledge, because you need to choose between a word or numbered name.
Instead of trying to understand everything yourself, it makes sense to defer to a professional for advice. Not only will this reduce your workload, but it will also allow you to hit the ground running as quickly as possible.
If you’re at the next stage in your business journey, you may consider merging with another company (or acquiring a business).
As you may expect, this is an even more complex process. In Ontario, you’ll need the following information to complete an amalgamation:
- Corporation name and Ontario Corporation Number of all companies involved.
- Administrative information (including NAICS business activity code)
- Amalgamation agreement or directors’ resolutions
- Chosen amalgamation method (long-form or short-form)
- Schedule A form (for signed statements)
- Schedule B form (either long-form or short-form option)
- Name search report (if choosing new name)
- Legal opinion (in some cases)
- Date of amalgamation articles
- Registered office address
- Number of and details about directors
- Restrictions on powers of business (if applicable)
- Details on share structure
- Provisions for an amalgamated corporation (if applicable)
That’s a lot to take on, and many business owners get confused over decisions such as whether to choose short-form or long-form amalgamation.
As well as gathering all this information, you’ll need to pay close attention to agreements, contracts, and commitments before signing anything and check you’re happy with your agreement. It’s therefore recommended to consult with a lawyer to guide you through the process.
Sometimes, things don’t last forever. Maybe you’re ready to say goodbye to your current business and start a new venture, or perhaps you want to retire or return to employment. Whatever the case, it’s not as simple as sending a quick notice to the government that you want to close your business and tear everything up.
The steps you need to take will depend on exactly what you intend to do with your business, but in almost all cases, it’s a good idea to work with a legal professional to tie up loose ends and face legal issues later down the road.
If you want to pass the business on to someone else, you need to develop a solid succession plan that’s tax-efficient and legally sound. Even if you’re transferring ownership to a family member, don’t get complacent.
Or, if you want to sell the business, you need to ensure you’ve settled outstanding payments before passing it on and avoid legal misunderstandings when filing the paperwork to transfer ownership. Due to the complexity, FedDev Ontario recommends working with a lawyer to review documents for you.
Annual corporate maintenance
Even if you don’t need to incorporate, amalgamate, or dissolve your business, you still need to carry out plenty of regular administrative tasks.
The Canada Business Corporations Act (CBCA) states that companies must file annual corporate resolutions and a Form 22 Annual Return. Similarly, the Ontario Business Corporations Act (OBCA) requires annual corporate resolutions.
Plus, even inactive and smaller companies need to hold an annual meeting where shareholders discuss topics like financial statements, the election of directors, and any auditor reports. The only alternative is to get all shareholders and directors to sign a resolution.
Failing to meet any of these requirements could result in the dissolution of your company. Corporations Canada’s policy is to dissolve a corporation if it fails to make its returns for two years or more (and it has the right to do this sooner). This is just about the worst outcome a company could face.
Understanding the requirements businesses face and ensuring you meet the deadlines for all these tasks is a lot to handle on top of the normal day-to-day tasks involved with running a business. It therefore makes sense to delegate everything to a lawyer, who can ensure you’re complying with all legal requirements and have used documentation correctly.
Ready to get started?
Navigating the legal side of a business can be a minefield, but it doesn’t have to be unless you try to handle everything alone. From a complex acquisition to sorting out the administration involved in the day-to-day activities of running a business, having a legal professional by your side will give you the confidence you’re complying with requirements correctly and free you up to work on other elements of your business.
At Jeffrey Murray Law, our corporate lawyer services help corporations across Belleville and Ontario to manage their incorporations, amalgamations, dissolutions, and annual corporate maintenance. To find out more, contact us today.
DISCLAIMER: This website is for general information purposes only. Readers are cautioned to obtain legal advice as early as possible directly from a lawyer regarding the particular circumstances of their own situation. Do not rely on the information you find here as constituting legal advice as it is not possible to provide complete answers to any given question without a retainer that includes a detailed review of your situation.
A Clear Way Forward
Legal services should make your life easier rather than harder. We’re here to empower you; not to bombard you with information you don’t understand.
At Jeffrey Murray Law, we consider ourselves part of the local community and want to get to know our clients as individuals with their own needs and goals first and foremost.
We’ve consistently demonstrated a commitment to meeting our clients where they are today and adapting to those needs. That means explaining each step of the process in plain English so you understand what’s happening, and we even offer virtual consultations to ensure that your schedule won’t hold you back. For Belleville Lawyers, look no further.