We assist our clients with the formation of businesses, including corporations, partnerships and joint ventures.

Incorporations

Corporations are typically used to operate a business as they are a separate legal entity and its shareholder are not liable for its debts and obligations. In addition, they offer flexibility in terms of how to structure the corporation.

The incorporation process typically involves two main steps:

1. Articles of incorporation are filed with the federal or Ontario government. The articles contain information such as the corporation's name, the corporation's registered and mailing addresses, first directors and share structure. If a name other than a numbered name is used for the corporation, corporate searches would first be conducted to ensure the desired corporate name is available.
2. The corporation is formally organized. As part of the organization process, we prepare the organizational resolutions of directors and shareholders through which, among other things, the directors are elected, officers are appointed, shares are issued and by-laws are established. In addition, we prepare registers, ledgers listing the directors, officers, shareholders and details concerning share transactions. This documentation is all placed in the corporation's minute book which can be in physical or electronic form.

Where a corporation is owned by more than one shareholder, we commonly prepare a shareholder agreement which deals with various matters including corporate management, financing, distribution of profits, restrictions on share transfers, death or disability of a shareholder, non-competition and confidentiality and dispute resolution. Shareholder agreements are instrumental in providing structure to the operation of the corporation and both preventing and resolving disputes which may arise between shareholders.

Partnerships

A partnership arises as a matter of law when two or more persons are carrying on a business in common with a view to profit. In such a case, the partnership is subject to Ontario's Partnerships Act which contains rules governing the relations and obligations of partners. The rules can be severe in certain circumstances and, as a result, a partnership agreement is generally used to vary these rules.

A partnership agreement provides for a flexible business structure. A partnership agreement will typically deal with matters which include profit sharing, roles and responsibilities, the mechanism by which new partners join the firm and existing partners leave the firm and the dissolution of the partnership.

Joint Venture

A joint venture is a contractual relationship between two parties which generally deals with the arrangement between the parties with a distinct service, operation or asset. A joint venture is a highly flexible form of business vehicle, but which does entail risks including the risk that the business will be recharacterized as a partnership and joint liability between venturers. These risks are commonly mitigated through a joint venture agreement. A joint venture agreement will also common deal with matters including the organizational and governance structure of the joint venture, accounting, contributions, profit sharing, the sale of each venturer's interest, non-competition and confidentiality and dispute resolution.