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| U.S. Term | Canadian Term* |
| Acquisition: Obtaining control of another corporation by purchasing all or a majority of its outstanding shares, or by purchasing its assets. | Acquisition: Obtaining control of a corporation by purchasing all or a majority of its outstanding shares, or by purchasing its assets. |
| Administrative dissolution: An involuntary dissolution of a corporation by an act of the Secretary of State or similar state authority, caused by the corporation's failure to comply with certain statutory requirements; especially the failure to file an annual report, to pay franchise taxes or maintain a valid Registered Agent. | Dissolution by Director (federal): An involuntary dissolution of a corporation by an act of the Director, if the corporation has not commenced business within three years after the date shown in its certificate of incorporation; has not carried on business for three consecutive years; is in default for a period of one year in sending to the Director any fee, notice, or document required by a business corporations statute; or does not have any directors or all the directors have resigned or have been removed without replacement.
Cancellation of certificate by Director (Ontario): The director may cancel a certificate of incorporation or any other certificate for a failure to comply with certain statutory requirements. |
| Advisory board of directors: An advisory board of directors are individuals appointed to advise an elected board of directors. This board is not bound by the duties imposed upon elected board members, and the corporation is not required to follow their recommendations. | Special committee: A committee appointed to advise an elected board of directors, such as on the merits of a take-over bid. The corporation is not required to follow the recommendations of a special committee. |
| Agent: Anyone who is authorized to act on the behalf of another. A corporation acts only through its agents; therefore, it is important to define what actions an agent is authorized to perform. | Agent: Anyone who is authorized to act on behalf of another person. A corporation acts only through its agents; therefore, it is important to define what actions the agent is authorized to perform. |
| Agent for service of process: An agent, required to be appointed by a corporation, whose authority is limited to receiving process issued against the corporation. Also known as a Registered Agent or a Resident Agent. | Registered office: An address (sometimes a head office or chief place of business) that is provided to the provincial or federal authority governing the corporation, to which notices and process may be served on the corporation, and where certain documents and books must be kept.
Agent for service: In Ontario, an individual or a corporation resident in Ontario required to be appointed as agent for service in Ontario of an extra-provincial corporation incorporated or continued under the laws of a jurisdiction outside of Canada (i.e., a foreign corporation) on whom service of process, notices, or other proceedings may be made. |
| Alter ego: A doctrine of law which disregards the principle of limited liability enjoyed by a corporate entity when it is proven that, in fact, no separate identity of the individual and corporation exists. The alter ego principle may also apply to relationships between corporate entities and their subsidiaries. | Alter ego: A doctrine of law that disregards the principle of limited liability enjoyed by a corporate entity when it is proven that, in fact, no separate identity of the individual and corporation exists. The alter ego principle may also apply to relationships between corporate entities and their subsidiaries. |
| Amended certificate of authority: A document issued by a state to a foreign corporation evidencing that the corporation has amended its original certificate of authority. | Amended extra-provincial licence: In Ontario, an application for amended extra-provincial licence endorsed by the Director evidencing that a corporation incorporated or continued under the laws of a jurisdiction outside of Canada (i.e., a foreign corporation) has changed its name or has continued under the laws of another jurisdiction. |
| Amendment: An addition to, deletion from, or a change of existing provisions of the articles of incorporation of a domestic corporation. | Amendment: An addition to, deletion from, or change to existing provisions of a corporation's articles. |
| Annual meeting: A yearly meeting of shareholders at which directors are elected and other general business of the corporation is conducted. | Annual meeting: A yearly meeting of shareholders at which directors are elected and other general business of the corporation is conducted. |
| Annual report: A required annual filing in a state, usually listing directors, officers and financial information. Also, an annual statement of business and affairs furnished by a corporation to its shareholders. | Annual return: A required annual filing setting out certain information relating to the corporation and its business.
Annual report: An annual statement of business and affairs furnished by a corporation to its shareholders. |
| Application for certificate of authority: The form filed in many states to qualify a corporation to transact business as a foreign corporation. | Application for extra-provincial licence: In Ontario, an application by an extra-provincial corporation incorporated or continued under the laws of a jurisdiction outside of Canada (i.e., a foreign corporation) for a licence to carry on business in Ontario. |
| Arm's length relationship: An arm's length relationship is a term used to describe a type of business relationship a corporation should have with a close associate to avoid a conflict of interest. For example, when you negotiate with your banker or your supplier, any agreement which results will likely reflect market value and commercially reasonable terms and conditions. When you loan money to your son or daughter, you may be inclined to provide much more favorable terms and conditions. The first example would be considered to be an arm's length relationship, while the second example would not. When your corporation does business with or makes loans to corporate officers and directors, the relationship must be at arm's length to avoid conflicts of interest. | Arm's length relationship: A relationship between two parties that are not related or not on close terms. |
| Articles of incorporation: The title of the document filed in many states to create a corporation. Also known as the certificate of incorporation or corporate charter. | Articles of incorporation: The document that creates a corporation, which results in the issuance of a certificate of incorporation. The articles of incorporation set out the name of the corporation; the province in Canada where the registered office is to be situated; the classes and any maximum number of shares that the corporation is authorized to issue; any restrictions on the issue, transfer, or ownership of shares; the number of directors of the corporation; and any restrictions on the business that the corporation may carry on. |
| Assumed name: A name other than the true name, under which a corporation or other business organization conducts business. Also referred to as a fictitious name, a trade name or "doing business as" (d/b/a). | Business name: A name other than the corporation's corporate name, under which the corporation carries on business. Also referred to as a trade name. |
| Authorized shares: The maximum number of shares that a corporation may issue pursuant to its articles of incorporation. | Authorized capital: The maximum number of shares that a corporation is authorized by its articles to issue. |
| Basis: Basis, a tax and accounting term, is the measuring rod against which gain or loss is measured. With stock, basis is what you pay for stock or the fair market value of property you contribute in exchange for the stock. | Basis: Also referred to as the cost base or tax basis. A security's basis is the purchase price after commissions and other expenses, and is used to calculate capital gains or losses when the security is sold or disposed of. |
| Bearer instrument: An instrument is payable to its bearer when by its terms it is payable to 1) a bearer or the order of a bearer; 2) a specified person or bearer; or 3) "cash" or the order "cash," or any other indication that does not purport to designate a specific payee. Bearer shares are a common example of a bearer instrument. | Bearer instrument: An instrument issued without record of the owner's name, payable to the bearer according to its terms and not by reason of any endorsement. The bearer is the person in possession of an instrument payable to bearer or endorsed in blank. |
| Blue sky law: A term used to describe state laws and regulations governing the issuance and sale of securities to residents of a state and the licensing and regulation of securities brokers and dealers. | no Canadian equivalent |
| Board of directors: The governing body of a corporation who is elected by shareholders. The directors are responsible for selecting the officers and the supervision and general control of the corporation. | Board of directors: The governing body of a corporation elected by the shareholders of that corporation. The directors appoint the officers and, subject to any unanimous shareholder agreement, manage or supervise the management of the business and affairs of the corporation. |
| Bond: A long-term debt secured by a mortgage on real property or a lien on other fixed assets. | Bond: A long-term debt security issued by a corporation in which corporate assets are usually pledged as security for payment. |
| Business corporation act: A business corporation act is the collection of laws in each state that governs corporations. | Business corporations act: The statutory provisions in each jurisdiction that govern corporations incorporated and continued as a corporation under that jurisdiction's laws. |
| Bylaws: The regulations of a corporation that, subject to statutory law and the articles of incorporation, provide the basic rules for the conduct of the corporation's business and affairs. | By-laws: Subject to the statutory provisions and the articles of the corporation, the by-laws regulate the business and affairs of the corporation. |
| Certificate of authority: Formal evidence of qualification issued by a state to a foreign corporation. | Extra-provincial licence: In Ontario, an application for extra-provincial licence endorsed by the Director allowing an extra-provincial corporation incorporated or continued under the laws of a jurisdiction outside of Canada (i.e., a foreign corporation) to carry on business in Ontario. |
| Certificate of good standing: A certificate issued by a state official as conclusive evidence that a corporation is in existence or authorized to transact business in the state. The certificate generally sets forth the corporation's name; that it is duly incorporated or authorized to transact business; that all fees, taxes and penalties owed the state have been paid; that its most recent annual report has been filed; and, that articles of dissolution have not been filed. Also known as a certificate of existence or certificate of authorization. | Certificate of compliance (federal) / Certificate of status (Ontario): A certificate issued by the Director stating that a corporation exists and has not been discontinued or dissolved. |
| Certificate of incorporation: The title of the document filed in many states to create a corporation. Also known as the articles of incorporation or corporate charter. | Certificate of incorporation: The document evidencing a corporation's incorporation under the laws of a jurisdiction, issued upon receipt of the articles of incorporation. |
| Close corporation: A corporation that elects in its articles of incorporation to be registered under the close corporation statutes of their state of incorporation. Some state close corporation statutes provide for a maximum number of shareholders. In addition, close corporation statutes may eliminate or limit the powers of the board of directors, prescribe preemptive rights to the shareholders or relax the corporate formalities. Exact specifications vary by jurisdiction. Not all state statutes provide for a close corporation provision. | Canada does not have statutory close corporations, which eliminate or limit the powers of the board of directors, and relax corporate formalities. Federally and in Ontario, there exists the private company.
Private company: A company in whose constating document, the right to transfer its shares is restricted, the number of its shareholders exclusive of employees is limited to not more than fifty, and any invitation to the public to subscribe for its securities is prohibited. |
| Closely held corporation: A closely held corporation is any corporation in which the stock is held by a relatively small group of people or entities. Stock of a closely held corporation is not publicly traded on any stock exchange. | Closely held corporation: A corporation whose shares are owned by a relatively small group of persons. Shares of a closely held corporation are not publicly traded. |
| Commingle: Commingling is the sharing and pooling of personal and corporate assets. For example, rather than maintain separate corporate and personal bank accounts, you choose to use one account for personal and corporate purposes. This is considered commingling and an easy way to become personally liable for corporate acts. | Commingle: To mix separate funds or property into a common fund. |
| Common shares: A class of shares that has no special features and possesses no greater rights than any other shares. | Common shares: A class of shares to which no special rights or privileges attach. |
| Compliant: As used throughout the Compliance WatchSM suite of services, this term refers to a level of completion of a legal entity's responsibilities to maintain the formalities of corporate existence under the laws of the jurisdiction in which it is formed. The term is not intended to mean or imply conformity with all of the federal and state regulatory or tax requirements that may exist for operating your business. | no Canadian equivalent |
| Consent resolution: A consent resolution is any resolution signed by all of the directors or shareholders, which authorizes a particular action. This act eliminates the need for face-to-face meetings of directors and shareholders. | Written resolution in lieu of meeting: A resolution in writing signed by all the directors or shareholders entitled to vote on that resolution at a meeting of directors, committee of directors, or shareholders. A resolution in lieu of meeting is as valid as if it had been passed at a meeting of directors, committee of directors, or shareholders. |
| Consolidation: The statutory combination of two or more corporations to create a new corporation. | Amalgamation: The combination of two or more corporations, after which they continue as one corporation. |
| Constituent: A party to a transaction; a corporation involved in a merger, consolidation or share exchange. | no Canadian equivalent |
| Contract creditors: Contract creditors are people or businesses which you owe money or property to because of a written or verbal contractual agreement. If you buy 30 widgets from Widget World, Widget World becomes a contract creditor. | Contract creditors: Persons to whom a corporation owes money or property because of a written or verbal contractual agreement. |
| Convertible security: A security that may be exchanged by the holder for another type of security. | Convertible security: A security that can be exchanged for another type of security. |
| Corporate charter: See Articles of Incorporation. | Corporate charter: See Articles of Incorporation. |
| Corporate indicator: A word or an abbreviation of a word that must be included in a corporation's name to indicate that the named entity is a corporation. Valid corporate indicators include: incorporated, corporation, limited, company, inc., corp., ltd. and co. The list of acceptable corporate indicators will vary depending upon the jurisdiction in which the corporation is registered. | Indication of incorporation: A word, expression, or abbreviation that must be included in a corporation's name to indicate that the corporation is an incorporated entity. Indicators of incorporation include "Limited," "Limitée," "Incorporated," "Incorporée," "Corporation," "Société par actions de régime fédéral," "Ltd.," "Ltée," "Inc.," "Corp.," and "S.A.R.F." |
| Corporate kit: A binder usually containing essential items for the routine maintenance and administration of a corporation or limited liability company. Corporate kits provided by AccountStreet include sample minutes and bylaws, stock certificates, a corporate seal and stock ledger. | no Canadian equivalent |
| Corporate seal: A corporate seal is a device made to either emboss or imprint certain company information onto documents. This information usually includes the company's name and date and state of formation. Corporate seals are often required when opening corporate or LLC bank accounts, distributing stock or membership certificates or conducting other corporate business. AccountStreet includes custom-made corporate seals as part of the Corporate Kit. | Corporate seal: The impression of a corporation's name on important documents such as share certificates, bonds, and debentures. Federally and in Ontario, a corporation is not required to adopt a corporate seal. |
| Corporation: An artificial entity created under and governed by the laws of the state of incorporation. | Corporation: A legal entity incorporated or continued under, and governed by, the laws of the jurisdiction of incorporation. |
| Corporation law: The statutory provisions of a state relating to domestic and foreign corporations. | Business corporations act: The statutory provisions of a jurisdiction governing corporations incorporated and continued under that jurisdiction's laws. |
| Cumulative voting: A procedure used for electing directors in which shareholders are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates. | Cumulative voting: A voting method that entitles each shareholder entitled to vote at an election of directors to cast a number of votes equal to the number of votes attached to the shares held by the shareholder multiplied by the number of directors to be elected. The shareholder may cast all of those votes in favor of one candidate or distribute them among the candidates in any manner. |
| Debenture: A long-term debt issued mainly to evidence an unsecured corporate debt. | Debenture: A long-term debt security evidencing an unsecured corporate debt. |
| Debt financing: A method of raising capital in which a corporation borrows money. | Debt financing: The raising of capital by issuing bonds or notes or by borrowing from a financial institution. |
| Derivative suit: A lawsuit brought by a shareholder on behalf of a corporation to protect the corporation from wrongs committed against it. | Derivative action: An action brought on behalf of a corporation by a shareholder, director, or officer of that corporation, for a wrong committed against that corporation. |
| Directors: The individuals who, acting as a group known as the board of directors, manage the business and affairs of a corporation. | Directors: Individuals elected by the shareholders of a corporation who, acting as a group known as the board of directors, manage or supervise the management of the business and affairs of that corporation. |
| Dissenters right: A right granted to shareholders that entitles them to have their shares appraised and purchased by the corporation if the corporation enters into certain transactions that the shareholders do not approve of. | Right to dissent and payment for shares: A shareholder of a corporation may dissent if the corporation resolves to undergo certain fundamental changes. When the action approved by the resolution from which the shareholder dissents becomes effective, the dissenting shareholder is entitled to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents. |
| Dissolution: The statutory procedure that terminates the existence of a domestic corporation. | Dissolution: The statutory procedure that terminates the existence of a corporation. |
| Distribution: A transfer of money or other property made by a corporation to a shareholder in respect of the corporation's shares. | Distribution: A transfer of money or other property by a corporation to its shareholders. |
| Dividend: A distribution of a corporation's earnings to its shareholders. | Dividend: A payment made out of a corporation's earnings to its shareholders, in the form of money, property, or shares of the corporation. |
| Employment agreement: An employment agreement is a contract between your corporation and an employee. These agreements can be written or verbal; although all employment agreements should be in writing. Employers are more likely to have employment agreements with key employees. The terms and conditions of an employment agreement should be consistent with statutes, articles, bylaws, and any existing shareholder agreements. | Employment agreement: A contract between a corporation and its employee. Employment agreements may be written or verbal. |
| Equity financing: A method of raising capital in which a corporation sells shares of stock. | Equity financing: The raising of capital by issuing shares in a corporation rather than by issuing bonds or notes or by borrowing from a financial institution. |
| Equity interest: An ownership interest; the interest of a shareholder as distinguished from that of a creditor. | Equity interest: An ownership interest; the interest of a shareholder as distinguished from that of a creditor. |
| Fictitious name: A name other than the true name, under which a corporation or other business organization conducts business. Also referred to as an assumed name, a trade name or "doing business as" (d/b/a). | Business name: A name other than the corporation's corporate name, under which the corporation carries on business. Also referred to as a trade name. |
| Fiduciary relationship: A relationship in which one party (the fiduciary) must act in good faith and with due regard to the best interests of the other party or parties. | Fiduciary relationship: A relationship of utmost good faith in which a person (a fiduciary) in dealing with property must act in the best interests of the person for whom the fiduciary acts, rather than in the fiduciary's own personal interest. |
| Foreign corporation: A term applied to a corporation doing business in a state other than its state of incorporation. | Foreign corporation (federal): A corporation incorporated in a jurisdiction other than the domestic jurisdiction.
Extra-provincial corporation (Ontario): A corporation incorporated or continued otherwise than by or under the authority of an Act of the Legislative Assembly of Ontario. |
| Fractional share: Ownership in a corporation in an amount less than a full share. | Fractional share: Ownership in a corporation in an amount less than a full share, which may be evidenced by a fractional share certificate or a scrip certificate. Unless the articles otherwise provide, a holder of a fractional share is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share. |
| Franchise tax: A tax or fee usually levied annually upon a corporation, limited liability company or similar business entity for the right to exist or do business in a particular state. Failure to pay the franchise tax or similar fees may result in the administrative dissolution of the company and forfeiture of the charter. | Filing fee: Federally, a fee levied annually on a corporation upon the filing of its annual return. |
| Going public: The process by which a corporation first sells its shares to the public. | Going public: The process by which shares are issued to the public for the first time by a corporation. |
| Good standing: A corporation is said to be in good standing when it has remained current with the necessary reports and fees required by the regulatory jurisdictions under which it operates. | Good standing: A corporation is in good standing if it has filed with the Director all documents required to be filed pursuant to a business corporations act and has paid all required fees. |
| Hostile takeover: A takeover that occurs without the approval of the target corporation's board of directors. | Hostile take-over: A take-over that occurs without the approval of the target corporation's board of directors. |
| Incorporation: The act of creating or organizing a corporation under the laws of a specific jurisdiction. | Incorporation: The act of creating or organizing a corporation under the laws of a specific jurisdiction. |
| Merger: The statutory combination of two or more corporations in which one of the corporations survives and the other corporations cease to exist. | Amalgamation: The combination of two or more corporations, after which they continue as one corporation. |
| Minutes: The corporate minutes are the written record of transactions taken or authorized by the board of directors or shareholders. These are usually kept in the corporate minute book in diary fashion. | Minutes: A written record of transactions taken or authorized by the board of directors or shareholders. Minutes are usually kept in a corporate minute book. |
| Name registration: The filing of a document in a foreign state to protect the corporate name, often in anticipation of qualification in the state. | Name registration: The registration of a business name. In Ontario, a corporation may not carry on business or identify itself to the public under a name other than its corporate name unless the corporation registers that name. |
| Name reservation: A procedure that allows a corporation to obtain exclusive use of a corporate name for a specified period of time. | Name reservation: Federally, a procedure that allows a corporation to reserve for ninety days a name for an intended corporation or for a corporation about to change its name. |
| No par value shares: Shares for which the articles of incorporation do not fix a par value and that may be issued for any consideration determined by the board of directors. | Federally and in Ontario, the business corporations acts prohibit par value shares. All shares are without par value, and may be issued for any consideration determined by the board of directors. |
| Not-for-profit corporation: A not-for-profit corporation is generally organized for some socially beneficial purpose, rather than for the direct monetary benefit of the directors or members. Not all not-for-profit corporations are tax exempt and some make a profit. However, the profit is not distributed to the members or directors. Also known as a non-profit corporation. | Not-for-profit corporation: A corporation carried on without the purpose of gain for its members. The letters patent of the corporation must provide that any profits or other accretions to the corporation must be used in promoting its objects. Also known as a non-profit corporation or a corporation without share capital. |
| Officers: Individuals appointed by the board of directors who are responsible for carrying out the board's policies and for making day-to-day decisions. | Officers: Individuals appointed by the board of directors to fill particular offices with the purpose of managing the corporation. |
| Operating agreement: A contract among the members of a limited liability company governing the membership, management, operation and distribution of income of the company. | Unanimous shareholder agreement: A written agreement among all the shareholders of a corporation, or among all the shareholders and one or more persons who are not shareholders, that restricts, in whole or in part, the powers of the directors to manage or supervise the management of the business and affairs of the corporation. |
| Organizational meetings: Meetings of incorporators or initial directors that are held after the filing of the articles of incorporation to complete the organization of the corporation. | Organizational meeting: A meeting of the directors of the corporation after the issuance of the certificate of incorporation, at which the directors may make by-laws, adopt forms of security certificates and corporate records, authorize the issuance of securities, appoint officers, appoint an auditor to hold office until the first annual meeting of shareholders, make banking arrangements, and transact any other business. |
| Organizer: The person(s) who perform the act of forming a limited liability company. | Incorporator: A person who signs a corporation's articles of incorporation. |
| Parent corporation: A corporation that owns a controlling interest in another corporation. | Parent corporation: A corporation that owns a controlling interest in another corporation, whether directly or indirectly. |
| Partnership: A business organization in which two or more persons agree to do business together. | Partnership: A legal relationship between two or more persons for the purpose of carrying on business with a view to profit. |
| Par value: A minimum price of a share below which the share cannot be issued, as designated in the articles of incorporation. | Federally and in Ontario, the shares of a corporation must be without par value. |
| Perpetual existence: Unlimited term of existence; characteristic of most business corporations. | Perpetual existence: An unlimited term of existence; a characteristic of business corporations. |
| Piercing the corporate veil: Piercing the corporate veil is a legal theory sometimes used to impose personal liability on shareholders, officers, and directors for corporate acts. This theory permits a court to disregard the separate identity of the corporation. | Piercing the corporate veil: A legal theory that permits a court to disregard a corporation's separate legal identity and to impose personal liability on directors, officers, and shareholders for corporate acts. |
| Preemptive rights: The right of a shareholder to subscribe ratably for his or her proportion of any additional shares issued by a corporation. | Pre-emptive rights: The right of a shareholder to purchase shares or other securities to be issued before the shares or other securities are offered to others and in an amount proportionate to the shareholder's current holdings (to prevent dilution of the shareholder's interest). |
| Preferred shares: A class of shares that entitles the holders to preferences over the holders of common shares, usually with regard to dividends and distributions of assets upon dissolution or liquidation. | Preferred shares: A class of shares that entitles the holders to rights and privileges over the common shareholders, usually with regard to dividends and distributions of assets upon dissolution or liquidation. |
| Professional corporation: A corporation whose purposes are limited to professional services, such as those performed by doctors, dentists and attorneys. A professional corporation is formed under special state laws that stipulate exactly which professionals are required to incorporate under this status. | Professional corporation: A corporation that holds a valid certificate of authorization or other authorizing document issued under an act governing a profession, and that may not carry on a business other than the practice of the profession. |
| Promoter: A promoter, in a corporation context, is one who generates interest and activity in and on behalf of a corporation before its formation. A promoter is usually personally liable for all pre-incorporation activities. | Promoter: A person or company who takes the initiative in founding, organizing, or substantially reorganizing the business of an issuer. An issuer is a corporation that has outstanding, issues, or proposes to issue a security. |
| Proxy: A written authorization given by a person to another party directing the party to vote on behalf of him/her. | Proxy: A grant of authority by a shareholder appointing another individual to vote that shareholder's shares. |
| Qualification: The filing of required documents by a foreign corporation to secure a certificate of authority to conduct its business in a state other than the one in which it was incorporated. Limited liability companies or similar business entities may also conduct this process. | Endorsement: In Ontario, the endorsement of an application for extra-provincial licence or an application for amended extra-provincial licence. |
| Quorum: The percentage or proportion of voting shares required to be represented in person or by proxy to constitute a valid shareholders meeting, or the number of directors required to be present for a valid meeting of the board. | Quorum: The percentage or proportion of voting shares required to be represented in person or by proxy to constitute a valid shareholders meeting, or the number of directors required to be present for a valid meeting of the board of directors. |
| Record date: The date for determining the shareholders entitled to vote at a meeting, receive dividends, or participate in any corporate action. | Record date: The date fixed by the directors for the purpose of determining shareholders entitled to receive payment of dividends, participate in a liquidation distribution, receive notice of a meeting of shareholders, vote at a meeting of shareholders, or for any other purpose. |
| Redeemable shares: Shares subject to purchase by the corporation on terms set forth in the articles of incorporation. | Retractable shares: Shares issued by a corporation that the corporation may repurchase on demand of the corporation.Redeemable shares: Shares issued by a corporation that the corporation is required by its articles to repurchase at a specified time or on the demand of a shareholder. |
| Registered agent: A person or entity designated to receive important tax and legal documents on behalf of the corporation. The Registered Agent must be located and available at a legal address within the specified jurisdiction at all times. Failure to maintain a Registered Agent in the jurisdiction in which the corporation is registered, may result in the forfeiture of the corporate status. Also known as a Resident Agent. | Registered office: An address (sometimes a head office or chief place of business) that is provided to the provincial or federal authority governing the corporation, to which notices and process may be served on the corporation, and where certain documents and books must be kept.Agent for service: In Ontario, an individual or a corporation resident in Ontario required to be appointed as agent for service in Ontario of an extra-provincial corporation incorporated or continued under the laws of a jurisdiction outside of Canada (i.e., a foreign corporation) on whom service of process, notices, or other proceedings may be made. |
| Registered office: The statutory address of a corporation. In states requiring the appointment of a Registered Agent, it is usually the address of the Registered Agent. | Registered office: An address (sometimes a head office or chief place of business) that is provided to the provincial or federal authority governing the corporation, to which notices and process may be served on the corporation, and where certain documents and books must be kept. |
| Regulations: Regulations are administrative rules that have the force and effect of laws. Government agencies promulgate rules. If you don't comply, you are subject to the possibility of fines or revocation of the corporate charter. | Regulations: Statutory instruments made in the exercise of a legislative power conferred by or under an Act of Parliament or of a provincial legislature, having the force of law when it is in effect. |
| Reinstatement: Returning a corporation that has been administratively dissolved or had its certificate of authority revoked, to good standing on a state's records. | Revival: Reviving as a corporation a corporation that has been dissolved. |
| Resolution: A formal statement of any item of business that has been voted upon. | Resolution: A formal expression of an opinion, intention, or decision made by the directors and/or shareholders of a corporation. |
| Restated articles of incorporation: A document that combines all currently operative provisions of a corporation's articles of incorporation and amendments thereto. | Restated articles of incorporation: A consolidation in one document of a corporation's original articles and all amendments to its articles. |
| Revised Model Business Corporation Act: A model corporation statute compiled by the American Bar Association that has been adopted in whole or in part by, or has influenced the statutes of many states. | no Canadian equivalent |
| S Corporation: A corporation granted a special tax status as specified under the Internal Revenue Code. The code is very explicit on how and when this election is made and the number of shareholders this type of corporation can have. Since this type of corporation pays no income tax, all gains and losses of the corporation pass through to the individual shareholders in proportion to their holdings. | no Canadian equivalent |
| Scrip: A form used to represent ownership of fractional shares in lieu of issuing share certificates. | Scrip: A certificate used to represent ownership of fractional shares in lieu of issuing share certificates. Unless the articles otherwise provide, a holder of a scrip certificate is not entitled to exercise voting rights or to receive a dividend in respect of the fractional share. |
| Security: A contract between a business and an investor whereby the investor supplies money and expects to profit from his or her investment. | Security: A share of any class or series of shares or a debt obligation of a corporation. |
| Securities laws: State and federal laws that govern the issuance, sale and transfer of stocks and bonds. | Securities laws: Provincial laws that govern the issuance, sale, and transfer of securities. |
| Share: The unit into which the ownership interest in a corporation is divided. | Share: The ownership of a fractional equity interest in a corporation. |
| Share exchange: A statutory form of business combination in which some or all of the shares of one corporation are exchanged for some or all of the shares of another corporation and neither corporation ceases to exist. | Arrangement (Plan of arrangement): An arrangement includes an exchange of securities of a corporation for property, money, or other securities of the corporation or property, money, or securities of another corporation. A corporation may apply to a court for an order approving an arrangement proposed by the corporation. |
| Shareholders: Shareholders are the owners of a corporation based on their holdings. They own an interest in the corporation rather than specific corporate property. Also known as stockholders. | Shareholders: Persons who hold an equity interest in a corporation. |
| Short-form merger: The statutory merger of a subsidiary into its parent corporation in which shareholder approval is not required. | Short-form merger: The statutory merger of a subsidiary into its parent corporation (vertical short-form amalgamation) or of two or more wholly-owned subsidiary corporations of the same parent corporation into one corporation (horizontal short-form amalgamation), for which an amalgamation agreement and shareholder approval are not required. |
| Sole proprietorship: An unincorporated business with a sole owner in which the owner may be personally liable for business debts and claims against the business. | Sole proprietorship: An unincorporated business with a sole owner in which the owner may be personally liable for business debts and claims against the business. |
| Special meeting: A shareholder meeting called so that the shareholders may act on the specific matters stated in the notice of the meeting. | Special meeting: A shareholders meeting other than an annual meeting of shareholders called so that the shareholders may act on the specific matters stated in the notice of meeting. |
| Statutes: Statutes are laws passed by the state legislature or U.S. Congress. Business corporation laws are statutes. Statutes often authorize an administrative agency to declare regulations that are used to supplement the statute. In the event of a conflict, statutes control over regulations. | Statutes: Laws passed by, and within the legislative jurisdiction of, provincial legislatures or the federal Parliament. |
| Stock: Stock represents ownership in a corporation. It may be represented by a certificate and can be common or preferred, voting or non-voting, redeemable, convertible, etc. The classifications and special designations, if any, of the stock are set forth in the articles of incorporation. | Share: The ownership of a fractional equity interest in a corporation. The interest may be represented by a certificate and can be common or preferred, voting or non-voting, redeemable, convertible, etc. The classifications and attributes of the shares are set out in the corporation's articles. |
| Stock certificate: Evidence of ownership of shares in a corporation. May also be referred to as a share certificate. | Share certificate: A certificate issued by a corporation evidencing a person's share ownership in the corporation. |
| Stock purchase agreement: A stock purchase agreement is an agreement between the shareholders and the corporation. It provides a mechanism to regulate the transfer and sale of corporate stock. Often, a stock purchase agreement will provide a right of first refusal in favor of the corporation or remaining shareholders in the event of a proposed sale of stock by a shareholder. A stock purchase agreement can also provide for a purchase upon the death, disability, retirement, discharge, resignation, or bankruptcy of a shareholder. | Shareholders' agreement: An agreement between shareholders and the corporation, which regulates the transfer and sale of the corporation's shares. A share purchase agreement will often provide a right of first refusal in favor of the corporation or remaining shareholders, in the event of a proposed sale of shares by a shareholder. It can also provide for a purchase of shares upon the death, disability, retirement, discharge, resignation, or bankruptcy of a shareholder. |
| Stockholders: Stockholders are the owners of a corporation based on their holdings. They own an interest in the corporation rather than specific corporate property. Also known as shareholders. | Shareholders: The owners of a corporation. Shareholders own an interest in the corporation, rather than specific property. |
| Subscribers: Persons who agree under specific conditions to purchase shares in a corporation. | Subscribers: Persons who agree under specific conditions to purchase newly issued shares of a corporation. |
| Subscription: The agreement executed by a subscriber. | Subscription: A written contract to purchase newly issued shares of a corporation. |
| Subsidiary: A corporation that is either wholly owned or controlled through ownership of a majority of its voting shares, by another corporation or business entity. | Subsidiary: A corporation is a subsidiary of another corporation if it is controlled by that other corporation, that other corporation and one or more corporations each of which is controlled by that other corporation, or two or more corporations each of which is controlled by that other corporation. A corporation is also a subsidiary of another corporation if it is a subsidiary of a corporation that is a subsidiary of that other corporation. |
| Takeover: A merger, acquisition or other change in the controlling interest of a corporation. | Take-over: An amalgamation, acquisition, or other change in the controlling interest of a corporation. |
| Target: A corporation that is the focus of a takeover attempt. | Target: A corporation that is the focus of a takeover attempt. |
| Tax-exempt organization: Any organization that is determined by the Internal Revenue Service to be exempt from federal taxation of income. A tax-exempt [organization] may be required to operate exclusively for charitable, religious, literary, educational or similar types of purposes. | Tax-exempt organization: Any organization that is determined by the Canada Customs and Revenue Agency to be exempt from federal taxation of income. A tax-exempt organization must: 1) not be a charity (although registered charities are exempt from income taxation); 2) be organized exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except for profit; 3) be operated exclusively for the same purpose for which it was organized or for any of the other purposes in 2) above; and 4) not distribute or otherwise make available for the personal benefit of a member any of its income. |
| Tort: A tort is any act or failure to act (if there was a duty to act) that causes harm or damage. Examples of torts include assault, battery, fraud, misrepresentation, defamation, libel, slander, invasion of privacy, and negligence. If there is a claim against your corporation, other than a claim by the government, it will likely be based in contract or tort. | Tort: Any act or failure to act (if there was a duty to act) that causes harm or damage, other than a breach of contract. |
| Trademark: A word or mark that distinctly indicates the ownership of a product or service, and that is legally reserved for the exclusive use of that owner. | Trade mark: A mark that distinguishes the goods or services of one person from the goods or services of others. |
| Treasury shares: Shares of a corporation reacquired by a corporation. | no Canadian equivalentFederally and in Ontario, a corporation may not hold shares in itself or in its parent corporation. |
| Underwriter: A company that purchases shares of a corporation and arranges for their sale to the general public. | Underwriter: A person or company who, as principal, agrees to purchase securities with a view to distribution or who, as agent, offers for sale or sells securities in connection with a distribution and includes a person or company who has a direct or indirect participation in any such distribution. |
| Voluntary dissolution: Action by shareholders, incorporators or initial directors to dissolve a corporation. | Voluntary dissolution: An action by shareholders or directors to dissolve a corporation. |
| Voting rights: Rights of shareholders to vote their shares pursuant to provisions of statutes, the articles of incorporation and the bylaws. | Voting rights: The rights of shareholders to vote their shares at a meeting of shareholders, pursuant to the provisions of statutes, the corporation's articles of incorporation, and the corporation's by-laws. |
| Voting or pooling agreement: A voting or pooling agreement is an agreement, preferably in writing, of two or more shareholders to vote their shares in a certain manner. The most common use of this agreement would be to pool voting strength for the election of directors. | Voting or pooling agreement: A written agreement between two or more shareholders providing that in exercising voting rights, the shares held by them will be voted as provided in the agreement. |
| Voting trust: A voting trust is an agreement among the shareholders of the corporation. Under a voting trust, shareholders transfer their shares of stock to a trustee in exchange for voting trust certificates. The trustee votes the shares in the manner directed in the voting trust agreement. Voting trusts are often used to preserve control of the corporation. | Voting trust: An agreement among the shareholders of a corporation. The shareholders transfer their shares to a trustee in exchange for voting trust certificates. The trustee votes the shares in the manner directed in the voting trust agreement. Voting trusts are often used to preserve control of the corporation. |
| Watered shares: Shares that have been issued for a consideration less than the par or stated value of the shares. | no Canadian equivalent
Federally and in Ontario, the shares of a corporation must be without par value. |
| Winding Up: The discharging of a corporation's liabilities and the distributing of its remaining assets to its shareholders in connection with its dissolution. | Winding up: The discharge of a corporation's liabilities and the distribution of its remaining assets to its shareholders in connection with its dissolution. |
| Withdrawal: The statutory procedure whereby a foreign corporation obtains the consent of a state to terminate its authority to transact business there. | Discontinuance: The statutory procedure for a corporation to export itself from the jurisdiction in which it is incorporated or continued into another jurisdiction. |