If you are a lawyer assisting a client with an Ontario incorporation, then there is a lot of information that you will need to gather from your client before preparing the incorporation application. This article aims to shed some light on what information lawyers typically gather from clients for incorporating a company in Ontario.
Initial Discussion
If this is a new relationship, most lawyers will set up an initial meeting with the potential client to learn more about the client’s needs and ensure that the lawyer can be of assistance to the potential client. Lawyers will want to get to know the client’s goals and the business that the client is wanting to carry out with their new corporation. This information is crucial for helping lawyers understand how to best structure the corporation.
Also, there is always a chance that, as a lawyer, you will feel that you are not the right fit for the potential client due to the type of business that they want to carry out—or other reasons—and you may decide to refer the client to a different lawyer or to find another lawyer to assist you with the project.
If there is a good fit between the lawyer and the client, then lawyers need to take the standard steps that they always do before working with a client (conflict check, ID verification, retainer agreement, etc.), which the Law Society of Ontario sets out in detail. Once those steps have been taken, lawyers can get started on the incorporation process.
Information Lawyers Should Gather from their Client to Incorporate in Ontario
Once you and your client have both agreed to work together, you will need to gather more information specific to incorporating a company in Ontario.
Below is a list of information that lawyers will typically gather from clients in order to start the incorporation process:
- Name: The name that the client would like to use for their corporation (unless they would prefer to be assigned a numbered name), including the legal ending of the name (Inc., Corp., Ltd., Incorporated, Corporation, Limited). Lawyers need to make sure that the name meets the requirements of Ontario’s Business Corporations Act. For more details, check out our posting All About Naming Your Corporation.
- Address: Registered office address of the corporation, which needs to be within Ontario, and cannot be a PO Box. Some lawyers (but not all) allow clients to use their address for an annual fee. There are also companies that will rent out addresses for a fee.
- Share Classes: Many corporations are incorporated with one class of shares—referred to as common shares—however, there are many different reasons why a client may want to incorporate their corporation with different classes of shares. This is something that a lawyer will need to discuss with the client. If more than one class of shares is required, then a lawyer will need to draft the share class provisions that meet the client’s needs. Drafting share class provisions takes skill and experience in order to properly document the purpose for each class of shares.
- Shareholder Information: Detailed information on who the shareholders of the new corporation will be, including their full legal names, addresses, e-mail addresses, citizenship, birth dates, etc.
If a shareholder is another corporation, lawyers will need to gather information about the corporation and the individuals who represent that corporation. In some cases, an incumbency certificate might be necessary to establish that a certain individual is authorized to represent a corporation as a shareholder. - Director Information: Detailed information on who the directors of the new corporation will be. This includes their full names, addresses, citizenship, email address, and more. Directors must also meet some minimum requirements set out in Ontario’s Business Corporations Act.
- Officer Information: Detailed information on who the officers of the corporation will be and what title they will be given. Corporations in Ontario typically appoint a President and a Secretary—each one of those is an officer role. One individual can hold more than one officer role, so one person can be both the President and Secretary. Other common officer roles are: Chief Executive Officer (CEO), Chief Operations Officers (COO), Chief Financial Officer (CFO), Treasurer, etc. (but corporations are not required to create any of those officer roles; it is optional). An officer can also be a director and a shareholder, so one person can hold more than one position within the corporation.
- Banking, accounting, and fiscal year-end information: If the Client already knows who the company will bank with, who the company’s accountant will be, and/or what fiscal year-end the company will have, then it is beneficial to collect that information, as well. Those details can be included in the post-incorporation organizing resolutions for the corporation. However, if those details are not yet decided on, then a lawyer can still proceed with incorporating and organizing the company without them.
- Official email address: Email is now becoming the most common way to receive communications from Ontario’s Business Registry. For that reason, you need to know what email address the client would like to use as the “Official Email Address” for the Corporation. A corporation’s “Official Email Address” is used by the Ontario Business Registry to contact the corporation regarding any filings required, notifications, etc.
Some lawyers will use their own email addresses (so that they receive communications on behalf of their clients), but others will use their client’s. - Catch-All: It’s always a good idea for lawyers to ask their clients one last catch-all question:
“Is there anything else that I should know about your business or your plans?”
Sometimes, this brings important information out of the woodwork that does not neatly fall into the list of information that lawyers planned on collecting.
Once this information is gathered, lawyers then use it to prepare the incorporation application (you can find a sample of the form here). Once drafted, the incorporation application should be shared with the Client for review. It is normal for there to be some back and forth between lawyers and clients at this stage, for example, in regard to questions about the share provisions, etc.
Changes might need to be made depending on the discussions. Once the client approves of the incorporation application, the application should be signed by them. The application is then ready to be submitted to the government of Ontario’s Business Registry.
After the incorporation application is approved and the company is incorporated, lawyers need to prepare the post-incorporation organizing documents for their clients and put together a Minute Book for the new corporation. For more details about Minute Books, you can check out this article, All About Corporate Minute Books.
There may be additional steps a lawyer needs to take, such as putting in place a Shareholders Agreement, however, this all varies from case to case, depending on the client’s needs.
We hope that this article gives a sense of what information a lawyer needs to gather for incorporating a company in Ontario. If you are a lawyer, and would prefer to carry out the process seamlessly with good precedents and a modern cloud experience, then the Tobuso platform will help you to incorporate, organize, and store your clients’ corporate records in a secure and efficient way. It also allows you to give real time cloud access to your clients or any other trusted party. Feel free to contact us with any questions you may have.
