The largest advantage of incorporation is that a corporation is deemed to have its own separate legal identity. The corporation has a legal personality, existence, rights and duties that are distinct from those of the individuals comprising that group who constituted the corporation. Thus, a shareholder will not be liable to the debts and obligations of the corporation, and the corporation is not necessarily liable for the actions of the individual shareholders. Additionally, the tax burdens of the shareholders and the corporation are separate, with corporations generally being taxed at a lower rate than individuals.

Directors are responsible for managing and supervising the management of the business and affairs of the corporation. Directors have a duty to act in the best interests of the corporation.

Officers are people appointed by the directors of a corporation to specific positions. These positions may include the president, treasurer, or chairman of the Board. Officers are essentially responsible for the day to day miniscule operations of the corporation. It is permissible for an individual to be a director, officer, and shareholder simultaneously, which is often the case in small business.

Shareholders make financial investments in the corporation and are thus adamant about ensuring the corporation excels in business. Shares represent an ownership interest in the company. Shareholders are responsible for ensuring the director(s) is acting in the corporation’s best interest, which in turn maximizes profitability paid to shareholders in the form of dividends. Shareholders can vote to remove the Director, or an individual on the Board of Directors, if they decide the best interest of the company is not being met. Shareholders are also responsible for approving certain decisions of the Director, such as changing the corporation’s by-laws and amending the Articles of Incorporation.

A non-disclosure agreement is a contract between parties wherein the parties restrict themselves from releasing confidential information regarding the other’s business operations. They arise when two businesses are contemplating doing business together. They function to protect information during discussions, proposals, reviews, and negotiations.

A minute book is a compilation of corporate records. When incorporating, minute books include many documents including the Articles of Incorporation, bylaws, initial resolutions setting out officers, forms of share certificates and more. Following preliminary corporate set up there are events that should be recorded in the minute books such as changes of the corporation’s directors and changes to share structure.

Although there is no legislation mandating a minute book per se, corporations must nonetheless organize and store corporate documents, and a minute book is a useful vehicle for doing so.

A properly kept minute book will facilitate proper functioning of the corporation, and it will be indispensable should you be audited by the Canada Revenue Agency. Corporate records are of course subject to Government review to ensure you are complying with the rules and regulations.

The area of business law is exceedingly complex. Additionally, as businesses may span multiple jurisdictions and subject matters there are many important issues that need to be considered for your business to run smoothly. A corporate lawyer can assist with navigating the many documents and forms involved with incorporating a business, maintaining a corporation through effective minute books, and advising on proper business expansion in a legal sense if your corporation flourishes. When constructing and running a business it is important that procedure is properly followed. Having a corporate lawyer to ensure all information is effectively portrayed is the best way to safeguard your business so it does not run into any troubling issues in the future.