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Complete Guide to Managing Your Corporate Proceedings

Need to act as a shareholder, officer or director? Manage your corporation's activities with our customizable documents for Directors' Resolutions, Shareholder Agreements and more.

Essential documents for business management

Business professional use these documents every day to operate their businesses.

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Step 1

Directors' Resolution

A Directors' Resolution can be used to record minutes at a director meeting or to describe director resolutions in lieu of a corporate meeting.

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Step 2

Share Purchase Agreement

A Share Purchase Agreement is a contract used for the sale of stock or shares between an existing shareholder of a corporation and another individual ...

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Step 3

Shareholder Agreement

A Shareholder Agreement is a contract between shareholders of a corporation. It specifies shareholder rights and responsibilities, and includes terms ...

Last updated January 12, 2024

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In the dynamic world of business, success isn’t just a destination—it’s a meticulously planned journey. 

That’s why we designed this comprehensive guide to help you navigate the various stages of incorporating your business and managing its corporate filings. We explain the paperwork needed to manage incorporation, governance, shareholder engagement, share transfers, and record keeping

Say goodbye to stacks of legal documents, confusing terminology, and the nagging worry of missing a critical detail. We have federal and provincial incorporation services to streamline the process and significantly reduce your stress load.

With LawDepot’s tools in your kit and these helpful tips, you’ll be managing your corporate proceedings with success in no time. 

So let’s get started.

Step 1: Get started by choosing a name

First, get ready to incorporate by choosing a name, identifying internal management, and filing your Articles of Incorporation. 

Choosing a name

Naming your business is an exciting and creative process, but there are legal requirements to be aware of. To incorporate, your name must pass a corporate name search and register with the federal or provincial government

Increase the chances of your name being approved by following these tips:

  • Make it unique. Include a distinctive element, such as a location or a made-up name. Use a descriptive industry term that suggests the nature of your business or describes what it does. Keep in mind that limiting your name to a particular geographical location will hamper your ability to expand into other markets. 
  • Do your research. Review other businesses in your industry and ensure the name you choose isn’t too similar to another company, individual, or term. This will avoid unnecessary confusion and potentially save you time and money. 
  • Avoid profanity and misleading terms. For obvious reasons, it’s best practice to avoid profanity or words that do not properly represent your business. Swear words won’t be approved and false representation and misleading marketing practices are illegal in Canada. 
  • Avoid words that might imply your company is associated with the government. If you’re not a Crown Corporation, don’t pretend to be. For example, the following words are prohibited and any proposed name including one of them will be rejected:
    • Association
    • RCMP
    • Co-op or co-operation
    • Parliament
    • Bureau
    • Certified
    • Ministry
    • Secretariat

Trade names vs trademarks

Trade names and trademarks are different from registered corporate names.

In Canada, a trademark is a word, phrase, symbol, or distinguishing mark that identifies your company. For example, “You’re richer than you think” is The Bank of Nova Scotia’s catchphrase. 

When registered with the government, your corporation gets exclusive usage rights to your approved corporation name in your province (or across Canada if you choose federal incorporation). In contrast, an unregistered trademark may give a business some regional rights, but it doesn’t protect its usage across Canada.

A trade name is the name under which you conduct your business. It’s not officially protected, but it‘s typically used for promotional purposes on signs, advertisements, and the internet. For example, The Bank of Nova Scotia’s tradename is Scotiabank.

A numbered corporation will usually want to operate under some kind of descriptive trade name. Maybe the name it wants is not available across Canada but something similar is available for use in its home province. Thus, a numbered corporation might use more than one trading name in different provinces. Or, when a corporation wants to operate in a new province where its name is already in use by a competitor, that extra-provincial corporation will need to register a different trade name in the new province. 

Step 2: Identify internal management

There are three types of individuals who run a corporation. At a basic level, you’ll need to identify shareholders, directors, and officers during your incorporation.

1. Shareholders

Shareholders can be individuals, companies, or organizations that own equity or shares in the corporation. They’re not personally liable for the debts and obligations of the company, but their profitability hinges on its financial success.

Shareholders have different rights depending on their share class. For instance, certain classes may earn a shareholder the right to vote on corporate matters. These details are set out in a Shareholder Agreement.

2. Directors

Corporations must have at least one director, and a minimum number of directors on the board of federal corporations must be Canadian residents. Directors are automatically considered officers of the corporation.

Typically, shareholders elect a Board of Directors to oversee the corporation's activities and affairs. They’re responsible for protecting shareholders’ interests, supervising the company’s managers, and directing daily operations.

Directors must: 

  • Be at least 18 years old and have legal capacity
  • Be an individual (not a corporation) 
  • Consent to be on the board
  • Not have bankrupt status

3. Officers

The company’s directors can appoint officers to manage the daily operations of the corporation. A director can be appointed to one or more of the named officer roles.

Technically, officers aren’t needed because directors are automatically considered officers of the corporation. Plus, the title of director is enough to do everything needed to run the corporation. Thus, the appointment of titled officers to various roles is, to a certain extent, stylistic. In the end, the extent to which it is necessary at all depends on the size of the company.

Traditionally, officers include a president, secretary, and treasurer. Alternatively, these roles may be styled as Chief Executive Officer (CEO), Chief Operations Officer (COO), and Chief Financial Officer (CFO).

The officers’ powers and responsibilities are set out in the Corporate Bylaws, which are the internal management rules of the corporation. 

The number of named officers and the roles of the officers will vary depending on the nature and needs of the business. Traditional officer titles and duties are:

  • President: Responsible for carrying out the company’s mission and vision.
  • Vice-president: Second in command and assists the president with implementing company strategies.
  • Treasurer: Manages all financial aspects of the business, including financial reports, budgets, banking, and more.
  • Secretary: Tends to corporate administrative tasks such as taking meeting minutes, complying with legal requirements, and record keeping.

Step 3: Filing Articles of Incorporation

Articles of Incorporation are the set of documents sent to the government when registering your business. It includes a high-level overview of your corporation: 

  • Business activities and restrictions
  • The number of directors
  • Share structure
  • Names of shareholders

Incorporate your business online with LawDepot to save valuable time and money. We’ll walk you through the steps and assist in filing the paperwork and registering your business.

In addition to our Federal Incorporation Service, LawDepot has incorporation services for:

Step 4: Co-ordinate a Director’s Organizational Meeting

After incorporating, it’s crucial to set up a Director’s Organizational Meeting to do some important housekeeping.

The first order of business is to approve your Corporate Bylaws—a vital document that sets the rules for internal management. For instance, the bylaws outline meeting rules, voting rights, internal policies, and the responsibilities of the directors, officers, and shareholders. 

Once the board of directors approves them, the Corporate Bylaws take effect. To change the bylaws after they’ve been approved, the company will need to use either a Directors’ Resolution or a Shareholders’ Resolution

The directors will need to set up a bank account in the corporation’s name. This is crucial to proving the corporation is a separate legal entity from its shareholders.

Speaking of shares, the directors must issue share certificates, which are documents that prove the number and type of shares that a shareholder owns.

Finally, the directors must approve a corporate seal. This is necessary because it’s used to authenticate and mark official documents.

Step 5: Schedule regular directors’ meetings

Directors’ meetings are pivotal forums for corporate governance and strategic planning. 

While quarterly meetings are common, some boards may meet more or less often. Ultimately, the frequency of the meetings depends on your company’s needs, industry dynamics, and specific circumstances. 

When meeting, it’s crucial to create detailed records of discussions, decisions, and action items. That’s why Meeting Minutes are indispensable for maintaining accuracy and accountability. Plus, they offer transparency to stakeholders.

On top of regularly scheduled meetings, there’s always the flexibility of calling a special meeting when urgent matters arise. In fact, your business may need to make a timely decision without a formal directors’ meeting. In this case, it’s important to use a Directors' Resolution to provide a swift and documented approach to urgent matters. This document records decisions made by the board outside of formal meetings.

Step 6: Plan your shareholders’ meetings

A shareholders’ meeting, also known as an annual general meeting (AGM), is a gathering of the company’s shareholders (i.e., the people or entities that own shares in the company and are invested in its success). It provides a forum for communication between the company’s management and shareholders—a crucial ingredient for fostering transparency, accountability, and shareholder engagement within a company. 

Generally, most Canadian jurisdictions require an AGM, although the specifics of holding a meeting may vary. For example, some jurisdictions allow alternatives to a formal, in-person meeting. They may permit you to hold virtual meetings or dispense with them entirely if shareholders consent in writing to any resolutions. This will often make sense for companies with only one or two shareholders. For more information, refer to the Business Corporations Act of the jurisdiction in which you incorporated. 

How it works:

  1. Notice and agenda: Shareholders get notice of the meeting’s date, time, and location. The agenda outlines the topics up for discussion and being voted on. 
  2. Attendance: Shareholders attend the meeting in person, by proxy, or through electronic means, depending on the company’s bylaws and any applicable laws.
  3. Quorum: A valid meeting must have a quorum, which is the minimum number of votes required to conduct business. The quorum can be set as a certain number of voting shareholders (for example two out of the three voting shareholders) or expressed as a percentage of the overall voting shares. This should be specified in the company’s bylaws.
  4. Discussion and voting: Shareholders have the opportunity to vote on resolutions, either in person or through proxies. 
  5. Q&A session: shareholders may have the chance to ask questions, seek clarification, or converse with the company’s management.

Shareholders’ meetings play a pivotal role in corporate governance, and it’s equally crucial for companies to introduce a Shareholder Agreement during their inaugural meetings. Timing the introduction of a Shareholders Agreement is important because it outlines the rights, responsibilities, and obligations of the shareholders in the company. 

Creating a Shareholder Agreement early helps establish clarity and prevent misunderstandings from the outset. By addressing potential issues such as ownership percentages, voting rights, and decision-making processes, the document can help prevent disputes among shareholders down the line.

Step 7: Set rules for transferring shares

A Shareholder Agreement can outline the conditions under which shareholders can transfer their shares, ensuring a clear process is in place. Often, these rules are first presented in the company’s Articles of Incorporation and Corporate Bylaws. In any case, setting the rules for share transfers involves some key considerations:

  • Legal framework and company bylaws: Share transfers must comply with relevant company law, securities regulations, and any specific rules outlined in the company’s Articles of Incorporation. 
  • Pre-emptive rights: Your company may grant existing shareholders rights to purchase additional shares before they’re offered to external parties. 
  • Board approval: Directors may reserve the right to approve or reject share transfers. This allows them to assess the suitability of new shareholders and maintain control over the ownership of the company.
  • Restrictions: Directors may require board approval for transfers or implementing a right of first refusal (i.e., where existing shareholders have the first opportunity to buy shares being transferred). 
  • Procedures: Clearly define the procedure for share transfers, which can include specific documentation, board approval, and timelines. What’s more, transparent directors should communicate these rules to shareholders.
  • Regular review: The company’s needs may evolve or the ownership structure may change. For instance, there may be the issue of new shares to new owners or the creation of a new class of shares. As such, directors should regularly review share transfer rules to ensure they’re up to date and meet legal requirements.

Step 8: Keep proper records and stay organized

Forming and managing a corporation requires many different documents. That’s why being diligent with your paperwork can go a long way when it comes to running a successful business.

While it may seem like a lot, these documents and processes are absolutely necessary and serve specific purposes. Take the time to do things correctly and you’ll make it much easier for your company when it comes time to hire employees, file taxes, or sell your business in the future.

Don’t forget that LawDepot is here to supply you with corporate documents, a file management system, and discounted legal services

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