Corporate / Commercial Law
A corporation is a legal entity district from its owners. A corporation can own property, carry on business, possess rights, and incur liabilities completely separated from its owners. Shareholders own the shares of the corporation, but they do not own the property belonging to the corporation. The rights and liabilities of the corporation are usually very different than the rights and liabilities of the shareholders. Because of that, there’s an interesting number of people forming partnerships consisting of corporations as partners, especially in a joint venture context.
However, not every business is permitted to incorporate. Professionals are traditionally prohibited from incorporating their business. However, since around 2001, professionals in Ontario are allowed to incorporate professional corporations. It’s a balanced compromise.
The Key Features of Professional Corporations (PC) are:
1. Personal professional liability of those professionals within the PC are unlimited;
2. A Certificate of Authorization must be obtained from the governing bodies of such regulated professionals (e.g. lawyers wishing to a PC must obtain the authorization from the law society);
3. The name of the professional corporation must include the words "Professional Corporation" and cannot be a number corporation;
4. All officers and directors of the professional corporation are required to be shareholders of the corporation, and all shareholders must be licensed professionals within the same governing body;
5. The professional corporation may not carry on a business other than the practice of the profession.
A solid legal foundation is the key to success. HTW Law advises you on the pros and cons of incorporation as compared to other forms of business structures, allowing you to make an informed decision; and if you decide to proceed with an incorporation, HTW Law provides cost-effective, professional service to facilitate the incorporation. HTW Law will handle all the paperwork for you, including drafting the article of incorporation and the shareholder agreement.
HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.