Light Reading
Not many enjoy plugging in numbers after you’ve spent most of your efforts, at your corporation, being operational. However, financial statements required under the Ontario Business Corporations Act must be prepared as prescribed by the general regulation and in accordance with generally accepted accounting principles.
Courts give the appropriate deference to the business judgment of directors as per the business judgment rule. The business judgment rule accords deference to a business decision, so long as it lies within a range of reasonable alternatives. It reflects the reality that directors are often better suited to determine what is in the best interests of the corporation. This applies to decisions on stakeholders' interests, as much as other directorial decisions. The rule shields business decisions from court intervention where they are made prudently and in good faith.
A corporation incorporated under the laws of any province or territory outside of Ontario (an "extra-provincial corporation") planning to carry on business in Ontario will be subject to the requirements of the Extra-Provincial Corporations Act (“EPCA”) and the Extra-Provincial Corporations Act General Regulation and the Corporations Information Act.
The EPCA defines an extra-provincial corporation as "a corporation, with or without share capital, incorporated or continued otherwise than by or under the authority of an Act of the Legislative Assembly". This definition includes corporations incorporated anywhere outside Ontario, but excludes such non-corporate vehicles such as partnerships.
A partnership is a form of business organization that can be used by two or more persons in order to carry on business in common with a view to profit. The primary advantages of a partnership over other business organizations are the minimal formalities required to establish and maintain a partnership, and the high degree of flexibility in structuring relations between parties through a partnership agreement.
A business corporation is a type of business organization. A corporation is a legal entity created by individuals, or shareholders, with the purpose of pursuing a profit. Corporations can, among other things, enter into contracts, sue and be sued, own assets, remit taxes, and enter into financing arrangements.
The primary ways for a business to acquire another business include an acquisition of (1) a business’ assets; (2) a business’ shares; or (3) by way of an amalgamation. Choosing which structure to use involves many factors. Purchasers and vendors often have competing interests; understanding each factor and its effect on the parties is essential. Selecting the best structure is critical to the success of any acquisition.
