The owners of a corporation are called shareholders. Every corporation must decide what type of shares they will have and what the rights and restrictions of the different shares will be. Different rights can be given to different types or classes of shares. For example, people who hold one type of share may be allowed to vote while people holding another type of share may not. If different people have the same type of shares, their rights must be the same. Consequently, if you plan to have only one type of share, all shareholders will have the same rights.

Share specifications must be in Articles of Incorporation

The different classes of shares and the rights attached to each must be specified in the Articles of Incorporation. You must also specify any restrictions you want to put on the shares of the corporation. Even if you only want to have one class of shares, you must still specify any restrictions. For example, you may want to restrict who is allowed to own shares. Additionally, private corporations are restricted in the number of shareholders permitted and are not allowed to offer their shares to the public.

Fundamental rights included in every share

The rights which are attached to a share are determined by a corporation’s Articles. While corporations have wide freedom under the relevant federal or provincial regulations to determine the characteristics of the shares they issue, there are certain fundamental rights which must be included in at least one class of shares. These fundamental rights are the rights to:

1. Vote at shareholder meetings,
2. Receive dividends declared by the corporation,
3. Receive a portion of a corporation’s property upon its dissolution (subject to any claims against the corporation by non-shareholders, such as creditors).

These fundamental rights are presumed to exist in every share unless a corporation has issued more than one class of share.

NEW Ontario Business Registry

Businesses can now complete over 90 transactions online through the new Ontario Business Registry. This includes:

• register a new business name
• renew an existing business name
• dissolving an existing business
• incorporate, dissolve and change a corporation or not-for-profit or charity
• search for a business or not-for-profit corporation
• file notices and other documents under other business law statutes

Currently, mailing or emailing documents is also still available.

Registering existing business: Existing businesses and not-for-profits who wish to access their profile or file documents using the Registry will require a Company Key. Businesses can submit a request for their company key at Ontario.ca/BusinessRegistry.

New businesses and not-for-profits should visit the Ontario Business Registry: all services page for instructions on how to create and register their new business.

Corporations Annual Returns

As of May 15, 2021, the Canada Revenue Agency no longer accepts corporations’ annual returns on behalf of Ontario. Corporations whose annual returns were due during the period of May 15, 2021 through October 18, 2021 were exempt from filing. Corporations who have an annual return due on or after October 19, 2021 must file their annual returns in the Registry.

Get legal help

The legal issues involved in structuring a corporation can be quite complex, especially where there is more than one shareholder, and more than one type of shares. For legal advice and help, contact a business law lawyer.

								
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