BUSINESS TERMINOLOGY

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Annual Return:  All corporations are required to file a corporate annual return each year on or about the anniversary of their date of incorporation.  If you miss filing your annual return for 2 or more years, your corporation will be automatically struck by Corporate Registries.   If this happens, you have to apply to reinstate your Corporation before it has legal status to carry on business.

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Articles of Incorporation:  The Articles are the primary documents that create the legal entity of your corporation.  The Articles set out:  name of the corporation, classes and types of shares, restrictions on share transfer, number of directors, restrictions on type of business and any other applicable rules necessary for your corporation.

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By-laws:   Govern how the corporation does business, holds meetings and makes decisions.  By-laws should also contain banking and borrowing terms.

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Director:  Person appointed by the shareholders to elect the officers and to make the day-to-day decision of operating the corporation.  Although the corporation is its own legal entity, Directors may still become personally liable for decisions and events under certain circumstances.

Extra-Provincial Incorporation:   If you have or plan to have a business presence in another province, you should consider an extra-provincial registration in that province.  If you plan to have a presence across the country or in multiple provinces, it is possible a federal incorporated business is what you need.

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Federal Incorporation: If you have or plan to have a business presence in several other provinces, you should consider a federal incorporation.

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Joint Venture: Is a special business arrangement between two or more entities and is generally for a specific purpose and a limited time period.  These usually involve corporations but other entities may also be included.  Joint ventures are not partnerships and great care must be taken to avoid being confused with a partnership.   There are very different laws and consequences that apply to partnerships than those that apply to joint ventures.  If you want a joint venture, you want to avoid being confused with a partnership.   This is accomplished by having a well written Joint Venture Agreement in place before embarking on the joint venture.

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A Joint Venture may also apply in real estate investments where an individual(s) is the money person and the other party(s) are the title holders.  An agreement is necessary for each property to set each party’s rights and obligations.

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Minutes:  Are a written record of the meetings of the directors and shareholders.     The minutes contain the resolutions and other decisions of the directors and shareholders.

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Minute Book:  Every Corporation is required to keep and maintain a minute book as required under the Act.   A minute book contains all of the important records of the corporation relating to directors, shareholders, officers and decisions.  It also contains the corporate documents including the articles of incorporation, by-laws, share certificates, any USA, resolutions and meeting minutes of the directors and shareholders.

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Officer:   The officers of a corporation are the management and are appointed to their positions by the directors.  The officers of a corporation include the president, CEO, secretary, treasurer, and other individuals in similar positions.  The officers are responsible for managing the daily operations of a business.

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Professional Corporation: Certain occupations are prevented from operating a corporation.   These occupations are also regulated by an overseeing body or professional association, such as doctors, accountants, and lawyers.   However, these professions may set-up a Professional Corporation (PC) in accordance with the specific rules of their governing body.

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Registered Office:   The registered office of a corporation is the address within the where important corporate documents, such as the minute book, are kept, and where legal and other official documents may be sent.

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Resolution:  A resolution is an action or motion made that is voted on by the directors or shareholders, as the case may be.

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Share Structure:  Determines the different classes of shares and the number of shares in each class that the corporation may issue.

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Shareholder:  Can be an individual person, one or more persons jointly or another corporation that owns shares in the subject corporation.

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Unanimous Shareholder Agreement (USA):  An agreement that binds all present and future shareholders, and stipulates a number of terms to address a variety of issues and potential issues between the shareholders and between the shareholders and the corporation.