Business Law

It depends on your goals, your risk exposure, and your tax situation. The main advantage of incorporating is that the corporation is a legal entity separate from you. It can own property and incur debt, and your personal liability is generally limited to the value of your shares. Incorporation also opens estate planning and tax planning opportunities that are not available to sole proprietors. If your business involves significant liability, has multiple owners, or is generating more income than you need for personal expenses, incorporation is worth exploring. We can review your circumstances and help you decide.

A sole proprietorship is the simplest structure: you own and operate the business yourself, and your personal assets are exposed to business liabilities. A partnership is similar, but with two or more people sharing the business and its risks. In a general partnership, each partner's actions bind all other partners, and liability is unlimited. A limited partnership allows some partners to limit their liability to the amount they contributed. A corporation is a separate legal entity. It can own property, enter contracts, and incur debt in its own name. Shareholders' liability is generally limited to their investment in shares, and the corporation continues to exist independently of its owners.

The government filing fee for an Ontario incorporation is currently $360 (or $200 for a federal incorporation under the Canada Business Corporations Act), plus the cost of a NUANS name search report. Our legal fees cover preparing the articles of incorporation, initial bylaws, organizational resolutions, and setting up your corporate minute book. We provide a quote upfront after discussing the details of your incorporation.

While federal incorporation gives your business the legal right to operate anywhere in Canada and provides nationwide name protection, it does not eliminate provincial registration requirements. Every province and territory requires a federally incorporated business to register extra-provincially if it is considered to be carrying on business in that jurisdiction. This typically includes having a physical office, a local phone number, or employees in the province. These registrations are required for regulatory, tax, and compliance purposes, even though the corporation itself is governed federally. Ontario is somewhat different: while federal corporations must still file an initial return and ongoing annual information, they generally do not require a separate extra-provincial licence to carry on business in Ontario.

A shareholder agreement sets out how the business will be run and what happens when things change. It typically covers decision-making authority, profit distribution, restrictions on share transfers, what happens if a shareholder wants to leave or passes away (buy-sell provisions), dispute resolution, and non-compete obligations. Without a shareholder agreement, you are left with the default rules in the Ontario Business Corporations Act, which may not reflect what the shareholders actually intended. It is one of the most important documents a multi-owner business can have.

Buying or selling a business involves either purchasing the company's assets or purchasing its shares. Each approach has different legal, tax, and liability implications. The buyer's lawyer typically conducts due diligence, reviewing contracts, leases, financial statements, employees, and liabilities. Both sides negotiate the purchase agreement, which covers the price, payment terms, representations, warranties, non-compete clauses, and transition arrangements. We work closely with your accountant to structure the deal in a way that makes sense for your tax situation.

Yes. Commercial leases in Ontario are not subject to the same tenant protections as residential leases. The terms are fully negotiable, and landlords' standard-form leases are written to protect the landlord. A lawyer can identify unfavourable clauses, such as personal guarantees, demolition clauses, excessive common area costs, or restrictive use provisions, and negotiate better terms before you sign. It is much easier to negotiate before signing than to deal with a problem clause mid-lease.

Ontario corporations must maintain a registered office, keep corporate records (a minute book with articles, bylaws, shareholder registers, and meeting minutes), file an annual return with the Ontario government, and hold an annual meeting of shareholders (or pass a resolution in lieu). If your corporation is also a registered charity or not-for-profit, additional obligations under the Ontario Not-for-Profit Corporations Act (ONCA) or the Income Tax Act may apply. We can help you stay on top of these requirements so you remain in good standing.