The governance documents, agreements, and corporate structure that keep a private company defensible against disputes today and saleable tomorrow.
Most closely-held private companies in Ontario are incorporated by one or two founders, operated for years without incident, and never tested by a serious dispute — until, one day, they are. By that point, the documents that should have answered the hard questions (who can force a buy-out, what happens on a death, how is a deadlock resolved) have often either never been drafted or were populated from a template that nobody ever read.
Avion Law advises founders, owner-managers, and closely-held private companies on the corporate architecture that keeps them out of these disputes — and, when they arise, that gives them a predictable path through. We handle incorporation, shareholder agreements, reorganizations, and the unglamorous but essential work of keeping a minute book current.
Ontario and federal incorporations, including choice of jurisdiction, share structure, initial directors and officers, and the opening minute book. Professional corporations for regulated professions where applicable.
Shareholder agreements addressing governance, decision-making, transfer restrictions, buy-sell provisions on death or departure, and dispute resolution mechanisms.
General and limited partnership agreements, with attention to tax consequences and the distinctions between partnership and joint venture structures.
Rollovers under section 85 of the Income Tax Act, share exchanges, estate freezes, and holding-company structures designed with your tax advisor.
Preparation and ongoing maintenance of the minute book, including annual resolutions, director changes, share transfers, and the records that due diligence counsel will ask to see on a sale.
Advice to directors on their duties, to shareholders on their rights, and to boards on the procedures that keep corporate decisions defensible.
An Ontario private company is governed by one of two statutes: the Business Corporations Act for Ontario-incorporated companies, or the Canada Business Corporations Act for federally incorporated companies. The two statutes are similar in structure but differ in important details — including residency requirements for directors, annual return filing, and aspects of the oppression remedy. The choice of jurisdiction at incorporation has consequences that persist for the life of the company.
"A corporation has the capacity and, subject to this Act, the rights, powers and privileges of a natural person." Business Corporations Act, R.S.O. 1990, c. B.16, s. 15
Corporate directors owe fiduciary duties to the corporation itself. The leading authority is the Supreme Court's decision in BCE Inc. v. 1976 Debentureholders, which confirmed that directors must act in the best interests of the corporation and may, in doing so, consider the interests of shareholders, employees, creditors, consumers, governments, and the environment. This is not a shareholder-primacy standard — it is a broader corporate-primacy standard that gives directors considerable latitude, but also demands care in how decisions are documented.
Where a closely-held company goes wrong, the oppression remedy under both statutes provides a powerful tool. The oppression remedy addresses conduct that is oppressive, unfairly prejudicial to, or that unfairly disregards the interests of any security holder, creditor, director, or officer of the corporation. It is discretionary, fact-intensive, and — when pleaded properly — one of the most effective corporate-law remedies in Canadian jurisprudence.