HANDLING CASES IN COMMERCIAL & CORPORATE LAW IN THE GTA: MISIR & COMPANY
Looking for a lawyer to guide you through procedures related to corporate law in Toronto and the GTA region? The professional lawyers at Misir & Company will be happy to provide assistance.
INCORPORATION OF A NEW BUSINESS
Our lawyers will ensure that all the necessary steps are taken to incorporate your business in a timely manner.
SHAREHOLDER AND PARTNERSHIP AGREEMENTS
A shareholder or partnership agreement is a written agreement between the shareholders or partners of a business. The agreement covers the funding, structure, management and direction of the business, as well as outlining the responsibilities and obligations of the owners or partners. A unanimous shareholder agreement (USA) is a written agreement among all of the shareholders of a corporation that restricts, in whole or in part, the powers of the directors manage the business and affairs of the corporation. Shareholder agreements accomplish the following:
Partnership agreements must comply with the applicable legislation governing partnerships in the province where the partnership exists. The laws of Ontario recognize three types of partnerships: general partnerships, limited liability partnerships (LLP’s); and limited partnerships.
In Ontario, general partnerships and LLP’s are governed by the Partnerships Act whereas limited partnerships are governed by the requirements of the Limited Partnerships Act. Section 2 of the Ontario Business Names Act requires that the name of a partnership must be registered by all of the partners, except of a limited partnership carrying on business in accordance with the Limited Partnerships Act or where the partnership carries on business under a name that is composed of the names of all the partners.
Failure to register the name prohibits the partnership and partners of maintaining a proceeding in any court in Ontario in connection with business conducted by the partners or the partnership which becomes relevant in the context of partnership disputes notwithstanding the presence of a partnership agreement. Gaps in partnership agreements are substituted by provisions of the Partnership Act.
In the absence of a partnership agreement, a court will look to section 3 of the Partnership Act, assuming the partnership exists in Ontario. First a determination must be made as to whether a partnership exists. Section 3 of the Act sets out rules for determining:
Courts will also look at the intention of the parties as disclosed in the partnership agreement, if any. Courts will turn to the relevant provisions of the Partnership Act to determine the rights and remedies available to individual partners if a formal partnership agreement does not exist.
SHAREHOLDER AND PARTNERSHIP DISPUTES
Resolution for this type of dispute begins with application of the corresponding shareholder or partnership agreement. In the absence of a shareholder agreement, shareholders can protect and enforce their rights in the following ways:
The two most common remedies available to shareholders are derivative actions and oppression remedies.
With leave of the court, a derivative action may be brought by a current or former shareholder, director, or officer of the corporation or its affiliates. The court will grant leave where four conditions are satisfied:
There are three major categories of commercial leases: industrial, office and retail. A commercial lease is a written agreement between a landlord and business tenant. These types of leases involve making an offer to lease a commercial property and then negotiating the terms of leasing said property. Various types of commercial leases involve different rent calculations:
Our team will assist you in preparing leasehold agreements that will accommodate your business needs while minimizing your exposure to risk associated with leasing commercial property.
Mergers and acquisitions
Mergers generally involve the consolidation of two companies whereas acquisitions involve one company purchasing another. Mergers are also known as amalgamations. In a merger, shareholder approval is required between the shareholders of the two companies. The continuing corporation formed is a union between the amalgamating companies and has the rights and is subject to the liabilities of the amalgamating companies in addition to owning the property of the amalgamating companies. The amalgamated corporation is not a new legal entity but a continuation of the two companies as a single entity.
An amalgamated company is entitled to take the name of one of the amalgamating companies and is governed by a single corporate statute depending on the location of the head office the amalgamated corporation. The amalgamated corporations must enter into an amalgamation agreement except in the case of a “short form amalgamation”. The agreement must set out the terms on which the shareholders will receive money or securities in the amalgamated corporation. It must also set out the corporate by-laws.
In certain cases, where the amalgamation is between previously unaffiliated corporations, warranties and representations regarding its assets and liabilities must be set out in the amalgamation agreement. If the amalgamation is a short-form amalgamation under the Ontario Businesses Corporations Act, the articles must be accompanied by a copy of the directors’ resolutions. In an acquisition, the acquiring company obtains the majority stake in the acquired company, which does not change its name or legal structure. Acquisitions are often made as part of the acquiring company’s growth strategy, to expands its’ business, improve upon economies of scale or enter into a foreign or niche market.
The typical lease transaction begins with a term sheet, letter of intent or agreement to lease. These preliminary documents should set out the process to getting to the final lease agreement which is usually time dependent. Upon execution of the final lease agreement, a decision will need to be made if you wish to register the lease, or a notice or short-form thereof, on title to the applicable property. Where a tenant does not register its lease, the lease loses priority to subsequent purchasers, mortgagees and other third parties dealing with the property, who could take steps to terminate the lease.
Other items to consider include but are not limited to:
Financing can be obtained through the government or a private lender such as a bank. The Federal government offers small businesses up to $1, 000, 000.00 in financing for the purchase of land or business premises ($350, 000.00 for leasehold improvements and equipment). With assistance from the Federal government, businesses can support their financing requirements without using personal assets as security. There are various restrictions with this type of loan such as gross revenues must not exceed $10, 000, 000.00. Loan terms are usually between 7-10 years depending on the asset being financed.
Through private institutions such as banks, businesses can apply for commercial loans or lines of credit. Such institutions will impose restrictive covenants such as maintaining certain margins or revenue levels. We can assist you in negotiating the terms of these loans or applying to the government for a loan on your behalf.
MORTGAGE DISPUTES AND REMEDIES
When a mortgagor has defaulted under a mortgage, the mortgagee has a number of remedies to choose from:
Our team will assist you in choosing the most efficient strategy for meeting your needs while minimizing any costs involved in the selected strategy.