For entrepreneurs and business owners in Ontario, finding the perfect location is just the beginning of a complex journey that involves commercial lease negotiation and review. Over the last few months, the backdrop against which these negotiations take place has been further complicated by the challenges resulting from high financing rates.

In Ontario’s dynamic business landscape, entrepreneurs navigate a complex web of legal considerations, regulations, and contractual obligations to employees, lenders, and landlords. So, whether you are a seasoned business owner or have recently embarked on your entrepreneurial journey, it is critical to have a reliable legal ally you can rely on to safeguard your business, maximize its long-term success, and minimize risk exposure.

Key Benefits of Hiring a Business Lawyer to Help Your Business

Hiring a trusted business lawyer to advise and assist you with your business helps mitigate your potential legal exposure and liability. Additionally, a lawyer who understands your business goals and objectives can help you strategically navigate complex issues so you can focus on running your company.

Commercial Lease Review and Advice

After the inception of a business idea, the next step in the process for many entrepreneurs is to secure a commercial space from which the business will run. Whether a business requires a retail storefront or a private office, an experienced business lawyer can advise you on your options and risks when entering a commercial real estate investment. Depending on whether a business owner needs assistance negotiating a commercial lease or reviewing a purchase and sale agreement, a business lawyer can help you narrow down what options will help you achieve your business goals and secure any required financing.

Business Creation and Structure Development

Creating a new business is an exciting yet overwhelming time in any entrepreneur’s life. Therefore, working with an experienced business lawyer during this crucial time can play an essential role in helping your business thrive in Canada’s corporate landscape. Working through various legal, tax, and regulatory components with a legal professional who understands the ins and outs of these nuances can save time and confusion and will ensure that you and your business remain protected. A business lawyer can help you with initial market research, choosing the best business structure, and helping you develop a comprehensive and strategic business plan, leaving no stone unturned.

Corporate Governance and Regulatory Compliance

From incorporation and minute book compilation to internal investigations and privacy compliance, a skilled business lawyer can provide business owners with unique, forward-thinking legal solutions to ensure a business maintains appropriate corporate governance and regulatory compliance throughout its lifespan. Navigating the intersection of business, policy, law, and regulation can be demanding and overwhelming. As such, a business lawyer can help public and private corporations understand how particular laws, such as Ontario’s Business Corporations Act, apply to their circumstances to help them develop adequate policies and remain on top of their regulatory reporting and disclosure requirements.

Contract Negotiation and Review

No matter the size of an enterprise, businesses regularly enter into contractual relationships with various other parties at every stage of their development and operation. However, it is imperative to ensure that parties understand their rights and responsibilities before signing a contract and appreciate any nuances that may determine how a contractual dispute may be resolved. An experienced business lawyer can draft, review and negotiate vital contracts, including shareholders agreements, lease agreements, executive employment agreements, and merger and acquisition contracts to ensure no loose ends go unaddressed.

Proactive Advice on Corporate Restructuring

Contemplating a merger and acquisition or corporate restructuring can be overwhelming. However, a skilled business lawyer can help demystify the unknowns when expanding a customer base or taking over a competitor’s operation. By providing business owners with an understanding of these complicated financial and legal transactions, a business lawyer can help pave the path for a smooth transition.

Representation in Business Disputes and Litigation

In the event that a business dispute arises, having a trusted lawyer to call on who has a true appreciation for the business and an understanding of its objectives and priorities can ensure that swift action is taken to protect the rights of both the business and the business owner. Throughout the dispute resolution process, a business lawyer will ensure that the corporation understands the options available at every stage and will provide honest and practical advice to help ensure that the dispute is resolved in the best possible manner so that all parties can move forward. Furthermore, a lawyer who has helped construct the contract or agreement in question can leverage this knowledge.

Final Takeaways for Business Owners

Hiring a business lawyer can help you manage risk and avoid costly mistakes, whether you are embarking on a new business venture or managing a successful corporation. Hiring a trusted business lawyer to help you manage your business can be an invaluable investment, from negotiating a commercial lease to drafting comprehensive corporate policies. By navigating the legal complexities that apply to your daily business operations, a business lawyer can help ensure that the practices and procedures align with the business’ goals and objectives to ensure ongoing success and longevity.

Contact the Skilled Lawyers at Willis Business Law in Windsor-Essex for Comprehensive Business Advice

If you are looking for advice on business structuring for a new entrepreneurial idea or are looking for assistance with drafting corporate policies, the experienced business lawyers at Willis Business Law, led by William Willis, can provide you with trusted advice on financing, commercial real estate matters, and regulatory compliance. We work closely with every client to understand their unique needs to provide proactive advice on workplace policies and represent parties involved in a dispute. We will ensure that your rights are protected and that a sound resolution is implemented.

Whether you want to discuss incorporation, get advice on a commercial lease, or need representation in a business dispute, our corporate and commercial lawyers are ready to help. To arrange a consultation with one of our lawyers, contact us by phone at 519-945-5470 or complete our online form.

Expropriation is a process through which a municipal government takes all or part of a privately owned parcel of land for public benefit. When the government expropriates the land, they have an obligation to pay compensation to the land’s owner. However, depending on the applicable legislation and the nature of the taking, the form of compensation may vary. With the ongoing expansion of Ontario’s infrastructure, expropriation is occurring rapidly across the province. Therefore, it is essential for private landowners to be aware of the process and potential consequences of expropriation.

This blog post will explore the concept of municipal expropriation and will answer frequently asked questions regarding the expropriation process.

What is expropriation?

Expropriation refers to the taking of land by an expropriating authority exercising statutory powers, without the landowner’s consent, for public use. The expropriating authority (often the Crown or other authorized entity) must compensate the landowner.

What legislation governs expropriation in Ontario?

In Ontario, expropriation is governed by the Expropriations Act, which sets out both the rights of the government and private landowners. However, additional provincial legislation such as the Planning Act, Municipal Act, and environmental legislation may be applicable depending on the circumstances.

Expropriation has also developed through years of court decisions, some of which have been decided upon by the Supreme Court of Canada. In Ontario, the Ontario Municipal Board is the administrative tribunal with exclusive jurisdiction over expropriations, including compensation hearings.

What “land” is subject to expropriation in Ontario?

Under Ontario’s Expropriations Act, “land” is defined to include any “estate, term, easement, right or interest in, to, over or affecting land.”

Who is considered to be a “registered owner” of land?

The Expropriations Act defines a “registered owner” as an owner of land “whose interest in the land is defined and whose name is specified in an instrument in the proper land registry or sheriff’s office, and includes a person shown as a tenant of land on the last revised assessment roll.” Stated otherwise, a registered owner is usually a person named on a property’s title or tax assessment roll.

How much notice is given to a landowner before their property is expropriated?

Once a decision to expropriate has been made, the expropriating authority must first apply to obtain approval from the “approving authority” (usually the applicable municipal council or government Minister). A Notice of Intervention for Approval to Expropriate will then be served by the expropriating authority on each registered owner of the property in question. The Notice must also be published in a local newspaper for three continuous weeks.

The Expropriations Act states that the expropriating authority may expropriate land within four months of notifying the landowner. However, in most cases, this process takes longer (even without a formal hearing). Once a registered owner or other owner receives the Notice, they have 30 days to request an inquiry into whether the expropriation of their land is “fair, sound, and reasonably necessary.”

Can I prevent an expropriation from happening?

While expropriation is not an ideal circumstance for landowners, it is challenging to prevent expropriation from happening. In most cases, a landowner’s focus shifts from stopping the expropriation to ensuring they obtain full and fair compensation for their land.

However, in some limited circumstances, a landowner may be able to convince an inquiry officer appointed under the Expropriation Act that the proposed expropriation is unnecessary.

Who determines whether an expropriation is necessary?

If a landowner opposes the proposed expropriation of their land, they may ask for a “Hearing of Necessity” under section 7 of the Expropriation Act. A Hearing of Necessity determines whether the expropriation is “fair, sound, and reasonably necessary” for the intended infrastructure and construction. Once a hearing has been requested, an inquiry officer will notify the expropriating party, the landowner, and the landowner’s representative of the hearing details. The hearing will only address whether expropriation is necessary and will not address compensation issues.

After a hearing, the inquiry officer will prepare a report to be considered by the approving authority before determining whether the expropriation is necessary. However, despite a report recommendation against the expropriation, the approving authority may proceed with expropriation and provide written reasons for proceeding. Alternatively, the expropriation may proceed with modifications. The approving authority may also decide not to proceed with the expropriation.

Can a landowner bring their concerns to court?

A landowner can bring a court application to challenge the expropriation, but only on three grounds:

• To challenge the appropriating authority’s jurisdiction;
• To determine whether the expropriating authority is acting in bad faith; or
• To question whether the expropriation is compliant with the Expropriations Act.

What happens after an expropriation is approved to proceed?

If the approving authority approves the expropriation, section 9 of the Expropriations Act requires a plan of expropriation to be registered on the title of the affected lands within three months. After a plan of expropriation has been registered, title to the land “vests” in the expropriating authority.

However, this does not automatically provide the expropriating authority an immediate right to possession. Within 30 days of the plan’s registration, the expropriating authority must serve the registered owner or other owner with the following documents:

• Notice of Expropriation;
• Notice of Possession; and
• Notice of Election.

When can the expropriating authority take possession of the land?

Once a Notice of Expropriation has been served, the expropriating authority may enter the lands, either with the landowner’s consent or with an Order from the Ontario Municipal Board, to view the land to prepare an appraisal report. After the appraisal report has been prepared, a copy must be provided to the registered landowner along with an offer of compensation (if no agreement has already been made with the landowner) within three months of the plan registration before possession is taken.

What options do landowners have for compensation?

A landowner has two options for compensation for expropriation:

1. The landowner may accept a full and final settlement offer concerning any and all claims they may have under the Expropriations Act; or
2. The landowner may accept an offer as compensation for the land’s market value on a “without prejudice” basis. In this case, the landowner reserves the right to claim additional compensation from the appropriating authority.

What type of compensation is provided?

Section 13 of the Expropriations Act provides that when land is expropriated, “the expropriating authority shall pay the owner such compensation as is determined in accordance with this Act.” Expropriated landowners are entitled to fair compensation for all of their losses resulting from expropriation and, in essence, should make them “whole.” Depending on the circumstances, compensation may be based on:

• The market value of the land itself;
• The damages attributable to disturbance (for example, business losses);
• Damages for injurious affection (i.e. any loss in value to remaining property caused by the expropriation of the expropriated land);
• Special difficulties in relocation; and
• Other payment for reasonable expenses incurred upon final settlement (for example, legal fees and appraisal fees).

Any additional value the land could have had for a special purpose different from what the landowner used it for isn’t to be considered to increase the compensation payable.

How can a landowner claim additional compensation?

Under section 26 of the Expropriations Act, if the landowner opts to accept the offer “without prejudice,” they may pursue a claim for additional compensation through negotiation (informally or through the Board of Negotiation) under section 27. Alternatively, the landowner may seek to proceed with arbitration through the Ontario Municipal Board in accordance with section 29.

Contact the Lawyers at Willis Business Law for Trusted Advice on Municipal Expropriation

The trusted business lawyers at Willis Business Law regularly advise public and private clients on matters involving municipal issues, including expropriation and acquisition. When dealing with matters involving expropriation, it is crucial for landowners to understand their options and rights under the provincial Expropriations Act and other applicable legislation. At Willis Business Law, we help clients develop practical, tailored strategies to address their unique needs and position them for the best possible outcome.

Willis Business Law is based in the heart of downtown Windsor’s financial district and proudly represents clients throughout Windsor-Essex and the surrounding regions. If you have questions and concerns regarding municipal expropriations, contact us online or call us at 519-945-5470 to schedule a confidential consultation with a member of our team.

Across Ontario, individuals and groups often come together around a shared goal: supporting a community, advancing a cause, delivering programs, or creating a positive social impact. For many groups, that work begins informally. Over time, however, the group may need a more structured legal framework to apply for funding, enter into contracts, manage governance, or continue operating as people come and go.

One common option is to incorporate as a not-for-profit corporation. A not-for-profit corporation can be an effective structure for organizations created for purposes other than generating profit for owners or members. However, it is important to understand what that structure does and does not allow, particularly when the organization expects to receive funding, charge fees, fundraise, or conduct activities that may generate revenue.

Not-for-Profit Corporations in Ontario: The Basics

A not-for-profit corporation is a corporation formed for a purpose other than profit. These purposes may include social welfare, civic improvement, recreation, cultural activities, professional development, education, community support, or other non-commercial objectives.

In Ontario, not-for-profit corporations are governed by the Not-for-Profit Corporations Act, 2010. Once incorporated, the organization becomes a separate legal entity. This means it can own property, enter into contracts, apply for grants, open bank accounts, and continue operating even if its directors, officers, or members change.

A key feature of a not-for-profit corporation is that it does not operate to distribute profits to its members, directors, or officers. Any surplus funds must generally be used to advance the corporation’s purposes. This does not mean a not-for-profit can never receive more revenue than it spends in a given period. However, revenue-generating activities must be approached carefully, particularly where those activities may resemble profit-making business activities.

Revenue, Surplus, and Profit: Why the Distinction Matters

Many not-for-profit organizations receive money from multiple sources, including grants, donations, membership fees, program fees, fundraising events, sponsorships, and service fees. In some cases, an activity may generate revenue that exceeds the cost of running it.

However, not-for-profit organizations must be careful about planning or carrying on activities for the purpose of earning profit. The Canada Revenue Agency generally takes the position that a not-for-profit organization may engage in income-generating activities and may earn a surplus in some circumstances, but profit-making should not be the organization’s purpose. Where profit is anticipated, intentional, or part of an ongoing commercial activity, the organization’s tax status and compliance position may require closer review.

A common trap for new organizations is assuming that any business activity is acceptable as long as all the money goes back into the organization. However, the CRA applies strict rules here. A not-for-profit generally cannot run a completely unrelated commercial “side-business” solely to generate funds for its community work; the revenue-generating activities themselves should be closely linked to the organization’s non-profit objectives.

This is one reason why early planning is important. A group that expects to run programs, charge fees, sell goods, host events, or generate recurring revenue should consider how those activities fit within the organization’s purposes and whether a not-for-profit corporation is the right structure.

Not-for-Profit Corporation, Charitable Corporation, or Registered Charity?

The terms “not-for-profit,” “charitable,” and “registered charity” are sometimes used interchangeably, but they do not mean the same thing.

Not-for-Profit Corporation

A not-for-profit corporation is a corporate structure. It is created for purposes other than profit and is governed by corporate legislation. Its purposes may be community-based, cultural, recreational, professional, social, educational, or otherwise non-commercial.

Charitable Corporation

A charitable corporation is a corporation established for purposes that fall within legally recognized charitable categories. Common charitable purposes include relieving poverty, advancing education, advancing religion, and other purposes beneficial to the community that the law recognizes as charitable.

Registered Charity

A registered charity is an organization that has been approved by the Canada Revenue Agency for charitable registration under the Income Tax Act. Registration provides important tax advantages, including the ability to issue official donation receipts to donors. However, registered charities must meet ongoing compliance, reporting, and operational requirements.

Not every not-for-profit corporation is charitable. Not every charitable corporation is automatically a registered charity. If an organization wants charitable registration, it must apply to the Canada Revenue Agency and meet the applicable requirements.

Another Option: The Public Benefit Corporation

It may surprise some organizations to learn that the Not-for-Profit Corporations Act, 2010, includes an additional category: the public benefit corporation. A corporation qualifies as a public benefit corporation if it is a charitable corporation. A non-charitable corporation may also qualify if it receives more than $10,000 in a financial year from public sources, including government grants or similar financial assistance, or gifts or donations from people or organizations who are not members, directors, officers, or employees of the corporation.

Public benefit corporations are subject to stricter financial reporting requirements and different rules on the distribution of assets upon dissolution. Organizations that expect to rely on public donations, government grants, or similar public funding, even if they do not intend to pursue charitable registration, should consider whether they are likely to meet this threshold and what obligations would follow.

Charitable Activities and Related Business Activities

Charitable corporations and registered charities are subject to specific rules about their purposes and activities. A registered charity must devote its resources to charitable activities that further its charitable purposes.

That does not necessarily mean a registered charity can never generate income. Registered charities may, in some circumstances, conduct revenue-generating activities, including certain related business activities. However, those activities must comply with the rules that apply to registered charities and must be connected to, subordinate to, or supportive of the charity’s recognized charitable purposes.

This distinction is crucial because the rules for registered charities are actually much stricter than those for standard not-for-profits. While a not-for-profit organization has some flexibility to charge fees for its programs, a registered charity is legally prohibited from running an unrelated business. Under CRA guidelines, a charity can generally only operate a “related business”, which is narrowly defined as a business run almost entirely by volunteers (like a hospital gift shop) or an activity directly linked to a charitable purpose (like a sheltered workshop selling goods made by its clients).

For organizations at the planning stage, the question is not simply whether the organization expects to earn revenue. The more useful questions are what the organization’s purposes are, how revenue will be generated, how surplus funds will be used, and whether charitable registration is necessary or appropriate.

Tax Status and Donation Receipts

Incorporating as a not-for-profit corporation does not automatically make an organization a registered charity. It also does not automatically allow the organization to issue official donation receipts for income tax purposes.

A not-for-profit organization may qualify for certain income tax exemptions if it meets the applicable requirements. However, it cannot issue charitable donation receipts unless it has been registered as a charity by the Canada Revenue Agency.

Registered charities, on the other hand, can issue official donation receipts for eligible gifts. This can be a significant factor for organizations that expect to rely heavily on donations from individuals, corporations, or foundations. Charitable registration also brings additional obligations, including annual filings and restrictions on how resources may be used.

Before choosing a structure, organizations should consider their expected funding sources, whether donors will expect tax receipts, and whether the organization is prepared to meet the obligations that come with charitable registration.

Incorporating a Not-for-Profit Corporation

Ontario does not require every not-for-profit group to incorporate. Some groups operate as unincorporated associations. However, incorporation can offer several practical benefits.

A corporation is a separate legal entity. This can help protect directors, officers, and members from certain personal liabilities, although it does not eliminate all risk. Incorporation can also make it easier to enter into contracts, lease space, receive grants, hire staff, open bank accounts, and continue operating over the long term.

To incorporate in Ontario, applicants generally file Articles of Incorporation with the Ontario Business Registry. The applicants must consider the corporation’s name, purposes, registered office, directors, membership structure, and any special provisions that should apply.

If the organization intends to pursue charitable registration, its purposes and articles should be drafted with that goal in mind from the outset. Problems can arise when an organization incorporates with broad or unclear purposes and later discovers that its documents do not align with CRA requirements for charitable registration.

Articles of Incorporation

The Articles of Incorporation are the corporation’s foundational legal documents. They set out essential information about the corporation and are filed as part of the incorporation process.

For a not-for-profit corporation in Ontario, the articles typically include the corporation’s name, registered office address, number of directors, purposes, and any special provisions. Depending on the organization, special provisions may address restrictions on activities, how property will be dealt with on dissolution, limitations on distributions, or requirements connected to charitable purposes.

The purposes clause is particularly important. It should accurately reflect what the organization is being created to do. If the purposes are too vague, too broad, or inconsistent with the organization’s intended activities, this can create governance, funding, tax, or registration issues later.

For charitable corporations or organizations that plan to apply for charitable registration, the purposes must be drafted carefully to align with recognized charitable purposes and CRA expectations.

Bylaws and Internal Governance

Although bylaws are not filed in the same way as the articles, they are a critical part of a not-for-profit corporation’s governance structure. Bylaws set out how the corporation will operate internally.

They may address membership classes, members’ rights, directors’ terms, officer roles, meeting procedures, voting rules, notice requirements, conflicts of interest, financial procedures, and other governance matters. Clear bylaws can help reduce confusion and provide a practical roadmap for decision-making.

For not-for-profit corporations, governance structure is especially important because the organization may involve volunteers, members, donors, funders, staff, and community stakeholders. Bylaws should be tailored to the organization’s actual needs rather than treated as a standard form document.

Important By-Law Deadlines

Under Ontario’s Not-for-Profit Corporations Act, 2010, there are two important timelines to keep in mind after incorporation. First, the directors should pass an initial organizational by-law within 60 days of incorporation. If they do not, the corporation is deemed to have passed the standard organizational by-laws approved by the Ministry, which may not reflect the organization’s specific needs, membership structure, or governance preferences.

Second, the first annual meeting of members must be held within 18 months after the corporation comes into existence, and each subsequent annual meeting must be held within 15 months after the previous annual meeting. In practice, corporations should also be mindful of the timing of their financial statements, as annual meeting requirements are closely connected to financial reporting obligations. Together, these timelines mean that governance cannot be left on the back burner after incorporation.

Ongoing Obligations After Incorporation

Incorporation is only the starting point. Once a not-for-profit corporation is created, it has ongoing legal, governance, and financial obligations. 

These may include:

• Maintaining corporate records;
• Keeping proper financial records;
• Holding annual members’ meetings;
• Electing directors;
• Passing resolutions;
• Filing required corporate returns; and
• Meeting applicable tax filing requirements. 

Directors should also understand their duties and ensure that the corporation’s activities remain consistent with its purposes.

If the corporation is a registered charity, additional obligations apply. These include filing annual charity information returns, maintaining books and records, issuing donation receipts properly, and ensuring that resources are used in accordance with the organization’s charitable purposes.

Building a Strong Foundation for Community Work

Not-for-profit corporations play an important role in Ontario communities. They support arts and culture, recreation, education, social services, advocacy, professional development, and many other initiatives. However, creating a not-for-profit corporation involves more than choosing a name and filing documents.

Founders should consider the organization’s purposes, revenue model, governance structure, tax position, and long-term compliance obligations. They should also understand the differences between not-for-profit status, charitable purposes, and registered charity status before deciding which path to take.

With the right structure and careful planning, a not-for-profit organization can be better positioned to pursue its mission, manage its responsibilities, and build a stable foundation for future growth.

Contact Willis Business Law for Trusted Advice on Not-for-Profit Corporations in Windsor-Essex County

The knowledgeable not-for-profit and charity lawyers at Willis Business Law understand that embarking on a new journey, particularly one with a societal mission, can be both exhilarating and daunting. Setting up a non-profit organization can be complex, with numerous legal and administrative steps. However, it’s also a journey filled with boundless opportunities to make a real difference in your community and beyond.

Our team can help you develop innovative legal solutions and provide practical advice to meet your needs, from incorporation to governance solutions and financing. To schedule a consultation, contact us online or call us at 519-945-5470.

Securing the right commercial space is a pivotal decision that can make or break the potential success of your business enterprise. For entrepreneurs and business owners in Ontario, finding the perfect location is just the beginning of a complex journey that involves commercial lease negotiation and review. Over the last few months, the backdrop against these negotiations has been further complicated by the challenge of high financing rates.

This blog post will discuss offers to lease and commercial lease agreements in the context of negotiating terms and financing considerations. It will also consider the importance of obtaining sound legal advice throughout commercial real estate transactions. Finally, this post will explore the impacts of the rising interest rates on the Canadian commercial real estate market with a particular focus on the Windsor region.

Is an Offer to Lease a Binding Agreement?

When a commercial tenant negotiates with a prospective landlord, an initial document known as an Offer to Lease (or an Agreement to Lease) containing specific terms will often precede the commercial lease itself. While the commercial lease is the focal point of the negotiation, the Offer to Lease is just as important as the lease itself for setting the relationship between the parties.

The Offer to Lease is a critical document, as once the Offer to Lease has been negotiated and finalized, the deal between the parties is often considered complete. In some cases, landlords and commercial tenants may treat an Offer to Lease as a final lease, while in other situations, the Offer to Lease is used to determine the substantive features of the lease agreement by identifying of the parties, describing the premises, outlining the term of the lease, and setting out particulars regarding rent. When an Offer to Lease sets out the relevant information relating to the commercial lease, it can be considered binding and enforceable. Therefore, if a party fails to meet their obligations under the lease, they may face legal consequences. For these reasons, it is helpful for parties to obtain legal advice from an experienced commercial real estate lawyer to ensure that their rights and interests are protected from the start of the potential landlord-tenant relationship.

Negotiating a Commercial Lease

Commercial lease agreements are more than just contracts. They are the foundation upon which a business will flourish. The terms and conditions outlined in these agreements can significantly impact your overhead costs, flexibility, and, ultimately, your profitability. As such, understanding the intricacies of lease negotiation and review is paramount for any business owner, both seasoned and novice alike.

The prevailing financial environment adds to the complexity of lease negotiations in Ontario, as the commercial lending market has seen substantial fluctuations in financing rates. This has impacted various aspects of commercial leases and commercial lending.

In Ontario, commercial leases are governed by the provincial Commercial Tenancies Act. Commercial leases may contain various elements that are different from other lease types, such as net leases, design-build leases, and purchase options. Since commercial leases can impact the long-term viability of a business, using “boilerplate” lease agreements or failing to conduct sufficient due diligence can expose a party to costly litigation.

The Impact of Rising Interest Rates on Commercial Real Estate

Over the last year, Canada has seen rising interest rates, which has led to the curtailment of floating and fixed-rate commercial real estate lending activity across the country. Although the current interest rate is comparatively favourable compared to historical rates, many borrowers with the ability to temporarily forgo transacting are choosing to do so in hopes that the rates will soon stabilize or decline.

With debt service payments increasing due to the higher interest rates, underwriters are facing new challenges, and borrowers are asking for increased flexibility with respect to repayment to take advantage of potential future opportunities to refinance if rates decrease. The rising interest rate has also negatively impacted commercial lending activity. Therefore, while many people have continued to work remotely due to the COVID-19 pandemic, those seeking to return to the office or change office locations may reconsider their financing options.

The State of Windsor’s Commercial Real Estate Market

In Windsor, the first six months of 2023 saw a decline in commercial real estate deals and their values compared to the first half of 2022. This trend has been largely attributed to high interest rates. However, the city is still on track for its second-best year.

The Associate President of Coldwell Banker Richard Ellis (CBRE) Windsor has indicated that “[o]ffice space is not a large part of our market at the best of times, but those assets are facing challenges in terms of finding liquidity”, while industrial property has not been substantially affected. Compared to the number and value of deals in 2022, CRBE Windsor anticipates an overall year-end decline of 33 percent.

With an eye toward Windsor’s commercial real estate market, CRBE Windsor Senior Vice President Brook Handysides expects the market to ride out higher interest rates comfortably and stated that the Windsor region has been “outperforming other markets across Canada.” While many recent commercial real estate transactions have included local retail and land purchases for future industrial and residential development, office space remains uncertain, particularly in the downtown core. The current vacancy rate is “43.4 percent of listed space, including sub-listed space in the active market.” This vacancy rate can also be considered in light of the ever-changing choices of work arrangements, including remote and hybrid offices.

Willis Business Law Provides Quality Commercial Real Estate Advice to Windsor-Essex County Businesses

The experienced business lawyers at Willis Business Law frequently advise corporate clients on commercial matters, including financing and commercial real estate matters, such as commercial leasing. Our lawyers understand the need for commercial tenants and landlords to minimize risk exposure and preserve their interests, particularly in today’s uncertain financial landscape and commercial real estate market.

Willis Business Law has offices located in Windsor’s financial district. We proudly represent private sector and public clients throughout Windsor-Essex County and the surrounding region. If you have questions about commercial leasing or want to learn more about debt financing solutions, contact us by phone at 519-945-5470 or reach out online to schedule a confidential consultation with a member of our business law team.

A corporate minute book is essential to any corporation’s record-keeping documentation. Therefore, every corporation must ensure that they comply with the applicable legislation. In Ontario, it is not only considered to be a best practice but it is required by law that a corporation’s minute book remains accurate and up-to-date. A well-organized corporate minute book protects the corporation, its directors and officers from potential legal liability and penalties, and it also shows the corporation’s commitment to their responsibilities, accountability and transparency.

This blog will explain what a corporate minute book is, why it is important, the consequences of not maintaining an accurate corporate minute book, and how working with an experienced business lawyer can help a corporation ensure that their corporate minute book remains compliant with the law.

What is a Corporate Minute Book?

Whether an incorporated company is a small, local store, or a large business operating several locations, a corporate minute book provides foundational information for the corporation throughout its lifetime.

A corporate minute book is necessary for any company operating in Ontario. Section 139(1) of the Ontario Business Corporations Act permits a corporate minute book to either be in the form of a physical object, such as a binder, or an electronic format. It contains corporate information and acts as a historical record of all key decisions and actions taken by the company’s board of directors and shareholders. Section 140 of the Ontario Business Corporations Act requires that a corporate minute book contain a compilation of:

• minutes from meetings;
• resolutions passed;
• articles of incorporation;
• bylaws;
• shareholder agreements;
• register of directors;
• resolutions;
• securities register; and
• other official records.

In Ontario, section 140 of the Ontario Business Corporations Act requires every corporation, regardless of size, to prepare, maintain, and update certain records at its registered office or another location designated by its directors.

Why is it Important to Maintain a Complete, Well-Organized Corporate Minute Book?

The information contained within a corporate minute book can be useful for legal and regulatory purposes, and it must be available for inspection by directors, officers, shareholders, and other authorized parties. With all corporate records stored in a central location, it can also illustrate the corporation’s evolution through time and can help resolve any disputes or conflicts that may arise. An accurate and organized corporate minute book can help attract potential investors and demonstrate a corporation’s credibility and trust with its stakeholders.

Ontario law requires that each corporation maintains a corporate minute book. Failure to comply with this requirement may result in unnecessary penalties, fines, or legal disputes against the corporation. For example, section 256 of the Ontario Business Corporations Act states that an incomplete or inaccurate minute book may be considered to be a “misrepresentation,” which can result in a finding of liability by the corporation and its directors. Such an offence can lead to financial consequences or a term of imprisonment.

Moreover, an unorganized or inaccurate corporate minute book may result in a tax audit by the Canada Revenue Agency. At Willis Business Law, our lawyers provide clients with trusted advice and comprehensive strategies to ensure that corporations are not subject to costly business disruptions or other consequences.

When Must a Corporate Minute Book be Updated?

Many events could trigger a corporate minute book update. For instance, if the corporation is subject to an upcoming major event, such as a significant investment or merger, a business lawyer can help a corporation limit its liability exposure and ensure that all compliance requirements are adhered to so that the transaction can close smoothly. Changes to the directors, officers, or shareholders of the corporation must be reflected in the corporate minute book, in addition to changes in the location of a corporation’s registered office.

When a triggering event occurs, the corporation must update the corporate minute book through a resolution of the directors and shareholders.

There are several components of a corporate minute book which should also be reviewed and updated on an annual basis, such as:

• appointments of directors and officers;
• records of the previous year’s approved financial statements;
• records of the previous year’s declared dividends, management bonuses, and shareholder loans; and
• records of the previous year’s important corporate developments, such as share transfers.

Can a Corporation Operate if the Corporate Minute Book is Not in Good Standing?

Despite the law requiring every corporation to prepare and maintain a corporate minute book, it is not uncommon for a company to be operating without a corporate minute book. While it is recommended to prepare a corporate minute book during the incorporation of a company, one may be reconstructed to include statutory declarations, supporting resolutions, and any other necessary records.

In cases where a corporation has a minute book but it does not accurately reflect the current circumstances of the company, it is possible to rectify the resolutions to bring the minute book back into good standing.

If you require assistance with updating resolutions or preparing a new corporate minute book, contact a trusted corporate lawyer for assistance.

Contact the Business Lawyers at Willis Business Law for Advice on Corporate Minute Book Compliance

At Willis Business Law, our skilled business lawyers regularly guide and advise our corporate clients on their corporation’s obligations and responsibilities, which includes corporate minute book compliance. Our business law team understands that it is essential to ensure that corporate minute books are up-to-date, accurate and organized. We provide our clients with corporate minute book reviews and ensure that no compliance requirement has gone overlooked.

Willis Business Law is located in the heart of Windsor’s financial district. Our lawyers serve a wide range of public and private clients throughout Windsor-Essex County and the surrounding areas with a variety of business, employment and labour law needs. Contact us at 519-945-5470 or complete our online form to schedule a consultation with a member of our business law team to learn how we can assist you.

Whether you are a first-time entrepreneur or an experienced business owner pursuing a new venture, deciding to start a business can be overwhelming. While there are several different components, one fundamental consideration is determining what type of business structure to set up.

It is essential to have a solid understanding of the different types of business structures available, along with their benefits and drawbacks, as the business structure plays a crucial role in how the business will operate and grow. Additionally, the type of business structure chosen can significantly impact personal liability, tax consequences, and legal obligations.

Key Considerations for Determining the Best Business Structure

Business owners must make multiple integral decisions every day, and this obligation starts even before the business is up and running. Deciding on a business structure is not a “one size fits all” approach and requires business owners to have a clear vision and goal concerning the company. It is vital to have an understanding of:

• who will be involved and have control over the business;
• who will raise and provide business capital;
• who will receive profits and own business assets; and
• who will be responsible for debts, taxes and liabilities.

Once a business structure has been decided upon, the business owner(s) can take steps to fulfill their responsibilities under the chosen structure, for example, by drafting shareholder and partnership agreements or entering into a commercial lease, if applicable.

Distinct Business Structures in Ontario

Each type of business structure is accompanied by its own unique characteristics, benefits, and obligations. Generally, Ontario businesses fall within one of the four primary categories of business structures:

1. Sole Proprietorship,
2. Partnership,
3. Corporation, or
4. Co-operative.

Each type of business structure is strategically determined based on the goals for the business and aligns the business for success as it grows. Therefore, it is essential to consult with an experienced business lawyer who can provide guidance on the options best suited to the needs of the business and owner(s).

Sole Proprietorship

A sole proprietorship is an informal and relatively straightforward business structure that new business owners and small businesses commonly choose. In a sole proprietorship, one individual owns and operates the business; therefore, the owner/operator and business are considered the same entity concerning legal and tax obligations. The proprietor owns the business, makes the decisions, assumes the business’s risks and liabilities, and enjoys the business’s profits and benefits.

Key advantages of a sole proprietorship include an easy setup process with low-cost requirements and fewer administrative responsibilities compared to other business structures. For example, business income is included as income on the proprietor’s personal annual income tax return, so completing a corporate tax return is not required.

A sole proprietorship’s primary disadvantage is personal liability if the company has unpaid debts or is sued by a customer. Sole proprietors are required to raise their own capital to put into the business, and business income is taxed at a personal income rate, which may place business owners in a higher tax bracket.

Partnership

A partnership is an association between two or more “persons,” including real people or other legal entities, such as not-for-profit organizations. Generally, the parties to a partnership enter into an agreement that governs the overall partnership operations and sets out mechanisms for how expenses, revenue, and responsibilities are divided in percentage form. As a best practice, consulting with legal and tax professionals when preparing the agreement is essential.

Partnerships in Ontario may be subject to the Partnerships Act, Limited Partnerships Act, Business Name Act, and common law. Three types of partnerships may be formed, namely:

1. A limited liability partnership;
2. A limited partnership; and
3. A general partnership.

Advantages of a partnership include low start-up costs with easy set-up and dissolution processes. Partnerships also provide clear information regarding each partner’s share in the company for tax purposes. With more parties involved, partnerships also allow for greater access to business capital.

The disadvantages of a partnership are similar to those of a sole proprietorship in that there is no legal distinction between the business and the partners; therefore, one partner may become responsible for the actions and liabilities of another partner. Partnerships also open up the possibility of conflict and disputes between partners when making business decisions.

Corporation

Corporations are formal business arrangements that create a separate legal entity from the business owner(s) and offer significant liability and tax benefits. Incorporation provides for ownership of shares and distinguishes between the shareholders and the company. It is also vital to prepare shareholder agreements that set out mechanisms to deal with disputes within the corporation. Incorporating a business can be done at any time as the business grows, as business owners often choose to create a corporation once the business is generating substantial revenue. Incorporation can also occur at a federal or provincial level. Depending on the level of incorporation, the business may be subject to the Canada Business Corporations Act or Ontario’s Business Corporations Act.

Since a corporation is its own legal entity, its owners benefit from limited, not absolute, liability concerning the debts and liabilities of the corporation. Further, the corporation can continue to operate despite changes or the passing of its officers and shareholders and will only cease to exist once it is formally wound down.

Due to the substantial protections of incorporation, corporations must keep detailed records and submit an annual corporate income tax return. Incorporation also comes with higher start-up costs, no personal tax credits, and significant administrative responsibilities.

Co-operatives

A co-operative describes a group of people who work together to meet a specific common need. It is an incorporation owned by its members who can use the co-operative’s products and services. Generally, co-operatives are community-based businesses that focus on building and sustaining the local economy. Democratic participation is a key difference between a co-operative and a traditional corporation, as each co-operative member is entitled to one vote regardless of their level of investment and ownership of shares amount.

In a co-operative business, members can access competitive discounts when buying in bulk, compared to prices for products and services that a single business may obtain. Co-operatives also allow for individual services and products to be marketed together with other members, and surplus revenue can be considered an expense, as opposed to taxable income, that is distributed among the members.

As is the case when more than one person is responsible for decision-making, co-operatives are not immune to internal conflict between the members, which could cause a breakdown of the co-operative. Co-operatives also require each member to do their fair share of work to ensure the business’s success, which can create problems if one member fails to fulfill their responsibilities.

The Business Lawyers at Willis Business Law Provide Tailored Advice on Business Structures

The experienced business lawyers at Willis Business Law work with companies and entrepreneurs to provide practical and efficient solutions on various business law matters, including guiding clients on the choice of a business structure, developing sound workplace policies, and ensuring workplace health and safety compliance. Our lawyers work closely with clients to understand their goals in order to position their businesses for long-term success.

Located in the heart of Windsor’s financial district, Willis Business Law is proud to represent clients in the public and private sectors throughout Windsor-Essex County and the surrounding regions. To learn more about how we can assist you with your business set-up, call us at 519-945-5470 or contact us online.

Corporate decisions can have ripple effects throughout its hierarchy and substantially impact a corporation’s shareholders. For example, a corporation may choose to pursue a plan of action – such as selling its assets or amalgamating with another corporation – despite the objections of its minority shareholders. Ontario law empowers these shareholders to take legal action against the corporation based on their “dissent rights”.

When establishing a business’ structure and creating its corporate governance documents, a company must proactively address the rights and remedies available to its shareholders. Incorporating these key elements of the corporation-shareholder relationship into a forward-thinking shareholder agreement can help avoid costly disagreements in the future.

What are Shareholder Dissent Rights?

Section 185 of the Ontario Business Corporations Act (the “Act”) sets out the rights of dissenting shareholders. Shareholders’ dissent rights may be pursued when a corporation takes an action notwithstanding its shareholders’ objection. Sometimes called an appraisal remedy, dissent rights empower shareholders to demand a buyback of their shares at a fair market value.

When Do Shareholders Have Dissent Rights?

Shareholders have dissent rights in specific situations, such as those in the Business Corporations Act. For example, dissent rights may arise in circumstances where a corporation resolves to:

• Amend its articles or adds, removes, changes restrictions on the issue, transfer, or ownership of shares in a class or series of the shares of the corporation;
• Amend its articles to add, remove, or change any restriction upon the corporation’s business or powers;
• Amalgamate with another corporation;
• Be governed by the laws of another jurisdiction;
• Be governed by the Co-operative Corporations Act;
• Be governed by the Not-for-Profit Corporations Act; or
• Sell, lease, or exchange all or substantially all its property.

In the above situations, the shareholders who are entitled to vote on the resolution in question are the parties who may have dissent rights.

Why Do Dissent Rights Matter to a Corporation?

Dissent rights serve essential roles to the corporation and shareholders who enforce them. As a clear, enforceable remedy, a corporation can be assured that this generally prevents a shareholder from taking alternative action or commencing legal proceedings against the corporation.

With this knowledge, a corporation can encourage shareholders to invoke their dissent rights if they disagree with the proposed transaction to ensure a timely and efficient resolution of a dispute.

The Importance of Dissent Rights to a Shareholder

Knowing what dissent rights are and how and when to enforce them can be a powerful tool for a shareholder. With the understanding that there is a mechanism in place to allow a shareholder to exit a corporation on generally amicable terms, should the corporation seek to move in a direction which the shareholder does not agree with or does not wish to be a part of, a shareholder can have peace of mind concerning the decisions of the corporation.

How Does a Shareholder Exercise Dissent Rights?

In Ontario, a corporation must notify its shareholders of a proposed resolution that may trigger dissent rights before a shareholders meeting. The notice must contain sufficient information to allow shareholders to decide whether or not they wish to dissent from the resolution.

The below steps provide a general overview of the dissenting process. Dissenting shareholders should know that several intricate steps and strict timelines must be followed.

The Corporation Notifies Shareholders of the Resolution

Section 185(6) of the Business Corporations Act states that a shareholder shall send a written objection (Notice of Dissent) to the corporation at or before a shareholders’ meeting in which a proposed transaction is to be voted on. This requirement is subject to the corporation providing the shareholder notice of the meeting.

The Corporation to Notify Dissenting Shareholder of Resolution Adoption

If a corporation has passed and adopted the resolution, the corporation must notify any shareholder who objected to the transaction. The Confirmation Notice shall include the rights of the dissenting shareholder and the procedural steps to exercise such rights under sections 185(8) and 185(9) of the Business Corporations Act.

The Shareholders Submit a Demand for Payment

Once a dissenting shareholder has received a Confirmation Notice, they are subject to a strict timeline during which they must submit a Demand for Payment to the corporation seeking a fair value payment for their shares. After a Demand for Payment has been made, the shareholder is not entitled to participate in future successes and profits enjoyed by the corporation.

It should be noted that the Business Corporations Act provides a process by which a Demand for Payment may be withdrawn.

The Corporation Provides an Offer to Pay

Within seven days of the later of either receipt of the Demand for Payment, or the adoption of the resolution, the corporation must send the dissenting shareholder a written Offer to Pay. The Offer to Pay is required to include a sum, which is considered fair market value by the board of directors, of the dissenting shareholder’s shares, in addition to an explanation of how the value was determined. The fair market value determination may require assistance from a professional appraiser or valuator.

Accepting or Declining an Offer to Pay

The Offer to Pay will remain open for a set duration. If the dissenting shareholder accepts the offer, the corporation has 10 days from the acceptance date to pay the shareholder. If the Offer to Pay is not accepted while the offer is open or payment was not made, the parties may apply to a court to obtain the fair value of the shareholder’s shares.

A dissenting shareholder should consult with a tax professional to be fully apprised of the tax considerations arising from payment for their shares.

Consequences of Dissenting

Once a shareholder exercises their dissent rights, they lose all their rights as a shareholder, other than their right to be paid fair market value for their shares.

During the dissent process, the corporation may continue to conduct its usual business, including adopting resolutions and holding shareholder meetings. If a shareholder does not submit a Demand for Payment following their Notice of Dissent, they may continue to hold their shareholder rights and be included in the corporation’s ongoing business.

Contact Willis Business Law in Windsor-Essex County for Proactive, Comprehensive Shareholder Agreements

The knowledgeable business and corporate lawyers at Willis Business Law provide comprehensive, forward-thinking advice on the creation of business structures, including the drafting and review of shareholder agreements. By thoroughly assessing each client’s needs and preparing corollary agreements that anticipate possible risks and areas of future dispute, the firm helps clients avoid conflict and position their business venture for success.

Located in the heart of Windsor’s financial district and overlooking the beautiful Detroit Riverfront, Willis Business Law provides top-tier business law solutions to clients throughout Windsor-Essex County and the surrounding areas. To schedule a consultation with a skilled business lawyer, please call 519-945-5470 or reach out online.

Last year was a historic year for Windsor in many aspects. Of significant note was the automotive industry’s success from the impactful decisions made by several leading automobile companies.

The job market in Windsor has also seen incredible success, with 2023 bringing bright ambitions and substantial investments announced for many local communities. With the excitement of ongoing developments, the City of Windsor has much to look forward to in the coming years.

Windsor’s Automotive Sector Changing the Course of the Economy for Years to Come

The year 2022 brought exciting announcements for Windsor’s economy, the automotive industry, and the labour landscape. The City of Windsor is earmarked to be the recipient of approximately $8 billion in automotive industry investments from some of the industry’s leading companies.

The former director for the Centre for Automotive Research and Education recently highlighted that the decisions made by automotive industry leaders such as Ford, General Motors and LG are anticipated to have “profound consequences” on Windsor and the surrounding areas for years to come. Many have expressed their excitement regarding the substantial changes that are set to take place in Windsor’s automotive industry in the coming months as investments continue to roll in.

While the investments are intended to bring major changes to the local economy, these announcements also highlight Canada’s growing automotive industry by bringing anticipation for the industry’s future.

Windsor Will Be Home to Canada’s First Electric Vehicle Battery Manufacturing Plant

A joint venture between Stellantis and LG Energy Solutions to create Canada’s first major electric vehicle battery manufacturing plant brings the city a $5 billion investment and approximately 2,500 new job vacancies. It is expected that once additional investments in the plant supply chain begin forming, thousands of additional spin-off job vacancies will follow. Accompanying this large employment vacancy comes fresh considerations on how labour and employment law can protect hopeful employees.

The CEO of LG Energy has credited Canada’s renewable energy resources as a contributing factor in selecting Windsor for the site location. The addition of the plant is expected to bring numerous benefits to the city and surrounding communities. With the ground already broken and construction progressing, the city’s current focus is to secure significant portions of the supply chain, which will service the battery plant and various other LG facilities.

Battery Plant Expected to Maximize Operations by 2025

It is anticipated that the plant will be operational in 2024, with anticipated output maximized in 2025. When the plant is fully functional, it is expected to have the capacity to fulfill a substantial portion of Stellantis’ North American vehicle production requirements and manufacture battery cells and modules geared toward the next generation of electric vehicles.

The manufacturing plant is set to supply batteries across North America. It will be Canada’s first “gigafactory” (large-scale facilities that produce electric vehicle batteries), with its size equating to approximately 112 National Hockey League rinks.

The Mayor of Windsor has extended appreciation to community residents who “understand the importance of the investment” and have cooperated with the city in tolerating various nuisances, such as pile-driving and gravel trucks driving down residential streets to get to the site.

Local Educational Institutions Increasing Technical Education to Build Talent Pipeline

Post-secondary institutions in Windsor anticipate that the new battery plant will significantly impact their programming, research and development, and infrastructure opportunities. St. Clair College and the University of Windsor are expected to play a vital role in providing adequately trained talent to fill the upcoming job vacancies resulting from the new plant.

The institutions have indicated that they have been working to understand what the industry will require so that they can develop new programs to properly equip upcoming graduates with the skills and knowledge to succeed in the new automotive era.

The Director of External Affairs and Government Relations for LG Energy Solutions has stated that the company will work closely with post-secondary institutions to educate, retrain and retain local talent.

Willis Business Law in Windsor-Essex County Advises Clients on a Variety of Business and Employment Matters

With the addition of thousands of new job vacancies, state-of-the-art infrastructure, and anticipated economic growth, the residents of the City of Windsor has much to look forward to in the coming years. With these significant events comes the potential for new business developments and employment opportunities, which the trusted lawyers at Willis Business Law are ready to assist with.

Located in Windsor’s financial district, Willis Business Law is proud to assist clients throughout Windsor-Essex County regarding matters related to labour and employment law, corporate governance and mediation services. Contact us online or call us at 519-945-5470 to schedule a consultation or learn how we can assist you.