The statutory framework we work in
Ontario corporate practice runs across a layered framework: the Business Corporations Act (Ontario) (OBCA, R.S.O. 1990, c. B.16) governs Ontario-incorporated companies; the Canada Business Corporations Act (CBCA, R.S.C. 1985, c. C-44) is the federal alternative typically chosen for cross-border or national-name protection; and the Securities Act (Ontario), the Personal Property Security Act, and the Sale of Goods Act fill out the day-to-day file.
Two changes in the past four years matter to almost every owner-managed client. First, since January 1, 2023, every privately held OBCA corporation must maintain a Transparency Register listing individuals with significant control (25% or more of voting shares or fair-market value, or other significant influence). The register is internal — it is not filed publicly with the province — but failure to maintain it carries a $5,000 penalty for the corporation and up to $200,000 plus six months' imprisonment for any director or officer who knowingly authorizes non-compliance. Second, since January 22, 2024, federal CBCA corporations have filed beneficial-ownership information that is partially publicly searchable on Corporations Canada's online register.
How we structure transactions
Most owner-managed transactions resolve to one core decision: share sale or asset sale. Sellers usually prefer share sales — capital-gains treatment and, for active Canadian-controlled private corporations, potential access to the Lifetime Capital Gains Exemption (currently $1.25M per shareholder for qualifying shares). Buyers usually prefer asset sales — stepped-up cost base on depreciable property, ability to leave behind unknown liabilities (tax, employment, environmental), and freedom to cherry-pick the contracts they want. The negotiation hinges on tax modelling, indemnity scope, and whether a section 167 HST election is available to remove HST from the closing payment.
On the build side, we draft and negotiate unanimous shareholder agreements with proper exit machinery (right of first refusal, drag-along, tag-along, shotgun, valuation methodology, dispute resolution); we run section 86 estate freezes and section 85 rollovers as part of broader succession planning; and we coordinate with accountants on family trust insertions and TOSI-aware share structures from day one — not as a remedial step three years later.
Where we have been most useful in 2024–2026
Two recent developments are reshaping owner-managed work. The Ontario Court of Appeal's 2025 decision in Kong v. Au sharpened the evidentiary burden in shareholder oppression claims under OBCA s. 248: disagreement with a corporation's share valuation is not, by itself, oppressive conduct, and allegations of deficient financial records require expert opinion evidence to succeed. In parallel, the Court continues to enforce the two-year limitation period under the Limitations Act, 2002 strictly — including, after Lagana v. 2324965 Ontario Inc. (2025 ONCA), against late-filed OBCA compliance applications.
The practical takeaway for owner-managed businesses: a well-drafted shareholder agreement that codifies expectations (board seats, dividend policy, exit triggers, valuation methodology, dispute resolution) is the single most effective way to keep an oppression claim out of court — and to make any claim that does go to court harder for the other side to win.
What we do
- Federal and Ontario incorporations, multiple share-class structures, holdco/opco architecture
- Unanimous shareholder agreements (right of first refusal, drag-along, tag-along, shotgun, valuation, dispute resolution)
- Asset and share purchases / sales (with HST s. 167 election guidance and indemnity scope drafting)
- Reorganizations: estate freezes (s. 86), rollovers (s. 85), family trust insertions
- Commercial contracts: supply, distribution, services, master service agreements, NDAs, software licensing
- Commercial financing: GSAs, intercreditor agreements, PPSA registrations, postponements
- Shareholder oppression and partnership disputes (OBCA s. 248 / CBCA s. 241)
- Corporate maintenance, minute-book remediation, OBCA Transparency Register compliance
- Cross-border structures (US, Pakistan, Gulf) and intra-group reorganization
- Succession and exit planning, including LCGE-eligibility planning and management buyouts
Frequently asked
Should I incorporate federally (CBCA) or provincially (OBCA)?
For most owner-managed businesses operating only in Ontario, OBCA is simpler and cheaper to maintain. CBCA gives you stronger name protection across Canada and lets you use your name nationally without re-registering, but you still must extra-provincially register in Ontario and pay the additional annual filing. OBCA dropped its 25%-Canadian-resident director requirement in 2021, so that's no longer a reason to default to either statute.
Do I really need a shareholder agreement if my partner is a spouse, sibling, or close friend?
Yes — and especially then. Ontario courts repeatedly resolve oppression and dissolution disputes between former friends and family members where no agreement existed. Without a USA, the OBCA defaults govern share transfers, dispute resolution, and exit, and those defaults rarely match what either of you actually wants. A USA fixes valuation in advance, builds in a shotgun or right of first refusal, addresses death and disability, and lets the survivors run the business without going to court.
What is the OBCA Transparency Register and what happens if I ignore it?
Since January 1, 2023, every privately held OBCA corporation must keep a register of individuals with significant control — anyone who, directly or indirectly, owns or controls 25% or more of the voting shares or fair-market value, or otherwise exercises significant influence. The register lives at your records office (it is not filed publicly with the province). Penalties: up to $5,000 for the corporation and up to $200,000 plus six months' imprisonment for any director or officer who knowingly authorizes non-compliance. Review at least annually and update within 15 days of any change.
What is the difference between a share sale and an asset sale?
Sellers usually prefer share sales because they trigger capital-gains treatment and (for active CCPCs) can access the $1.25M Lifetime Capital Gains Exemption per shareholder. Buyers usually prefer asset sales because they get a stepped-up cost base on depreciable property, leave behind unknown liabilities (tax, employment, environmental), and pick only the assets and contracts they want. The negotiation hinges on tax modelling, indemnification scope, and an HST section 167 election to avoid HST on closing.
How long does it take to incorporate?
An online OBCA incorporation can be completed the same day. Articles are filed electronically through the Ontario Business Registry. The minute book, by-laws, organizational resolutions, share certificates, and any shareholder agreement typically take an additional one to three weeks depending on complexity and the number of shareholders.
Do you work on a fixed fee?
For incorporation packages, shareholder agreements, term-sheet review, and most contract review work, yes — fixed fee. For transactional work over $1M and for litigation, we work on a clear phase budget with caps and check-ins. We will tell you what we can fix-fee, what we cannot, and why, before you sign a retainer.