The Canada Business Corporations Act and other federal laws set forth a fairly narrow definition of a corporate reorganization, primarily applying to corporations that are insolvent, or in other words, bankrupt. In general, insolvent corporations reorganize or dissolve, and those are both obviously forms of reorganization. However, in common usage, reorganization has taken on a broader meaning that can include any number of measures by a corporation that have nothing to do with insolvency or bankruptcy. Anytime a business changes its structure in some way, that is considered a reorganization in the business world. The changes can be minor or significant – reorganization is a flexible tool for business to accomplish any number of goals.
Obviously, no one starts a business on a whim and one day just opens up shop. Months, sometimes years, of planning occur before a business actually opens to the public. From the most basic of questions, such as what kind of business you plan to engage in, to more complicated questions, including whether you will have partners or investors, who will own how much of the business, and related issues, a great deal of thought goes into forming and opening a business. Often, opening a business can be the most expensive, ambitious, and risky endeavour you will ever undertake. Proper planning matters.
A will is something that is on many a “to-do” list, but it rarely rises to the top of the list. For many people, just the thought of preparing a will is getting a little too close to admitting that everybody dies someday, you included. Many people rationalize that they are young – or relatively young – and in good health, so there is no hurry. You can get to it later. But if you want your estate distributed the way you really want it to be, the time to prepare a will is now. No one knows what will happen tomorrow. No one likes to think they might die tomorrow, but the cold hard fact is that for every tomorrow that becomes today, people die who did not think they would die tomorrow.
If you are buying a commercial property of business for the first time, or even if you have engaged in many such transactions, it is important to engage in proper due diligence. Many people – including many people involved in commercial transactions, but especially newcomers to the field – do not fully understand the purpose of due diligence or what it should entail at its most effective. While most commercial buyers, whether of real estate or businesses, understand that due diligence is a process that helps them evaluate a property, many view the process as a means to ensure they are not paying too much. That is part of it, but there is much more to it, and to conduct proper due diligence requires a better understanding of the information you hope to discover during the process.
Ontario has three primary forms of business structures — sole proprietorships, partnerships, and corporations. Your choice of which form of ownership you choose for your business could depend upon ease of formation, the expense of formation, taxation considerations, liability issues, control over company resources and decisions, and other factors. Each business form has different advantages and disadvantages, and you will have to decide which form best suits your situation and business goals. In this post, we will examine the three most common structures and highlight some of the pros and cons of each structure.