Glossary of Common Incorporation Terms
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Resident Canadian
Resident Canadian means a natural person who is:
- a Canadian citizen oridinarily resident in Canada,
- a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons, or
- permanent resident within the meaning of the Immigration Act of Canada and ordinarily resident in Canada
Incorporator
The incorporator is the person or persons who organize the corporation and file the Articles of Incorporation. Once the filing is complete the incorporator's function is complete and afterwards the management of the corporation is performed by the directors, subject to ratification by the Shareholders.
Director
A director is a person who is elected by either the incorporators or the shareholders of a corporation to conduct the affairs of the company. There are certain limitations to who can and can not be a director. For example, According to the Ontario Business Corporations Act, a Director cannot be: 1) A person who is less than eighteen of age. 2) A person who has been found to be incapable of managing property or who has been found to be incapable by a court in Canada or elsewhere*. 3) A person who is not an individual (i.e. a corporation). 4) A person who has the status of bankrupt. R.S.O. 1990, c. B.16, s. 118 (1); 2006, c. 34, Sched. B, s. 19 (1).
- Under either the Substitute Decisions Act, 1992, or the Mental Health Act.
Shareholder
A shareholder is a person, business entity or institution that owns at least one share in a corporation. Shareholders are the actual owners of the corporation. As owners, the shareholders have the potential to profit if the corporation is doing well but also the potential to lose their investments if the corporation’s fortunes decline. A shareholder is not personally liable for the debts and obligations of the corporation. In other words, a Shareholder can never lose more than the money they have actually put into the company. A shareholder does not have to be 18 or older. However, you should be careful, as the laws regarding underage shareholders may be complex. If you plan to list someone under the age of 18 as a shareholder, you might want to contact a local attorney who can give you legal advice based on your specific situation.
Officer
An Officer is someone who ordinarily works in the management functions of the corporation. An Officer does not need to be a Shareholder or Director, and is appointed and reports to the Directors of a corporation. It is possible for a person to hold two or more offices of a corporation. It is also possible for a person to be both a Director and an Officer.
Common Officer Titles
The most standard or common officer titles are: President, Vice-President, Treasurer, and Secretary. Larger corporations may also have a management structure that includes offices such as: Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer.
President
A president is an executive officer of a corporation and is usually responsible for the day-to-day operations of the corporation. The president will report to the board of directors.
Treasurer
A treasurer is an executive officer of a corporation responsible for supervising the accounting functions of the corporation and for keeping accurate and current financial records for the corporation.
Secretary
A secretary is an executive officer of a corporation who is responsible for maintaining records of the corporation such as minutes of meetings, shareholders lists, etc.
Incorporation Date
The incorporation date is the date that the contact person authorizes the filing of this Corporation. It is usually the current date unless there is some specific reason for wanting the corporation to not exist until a certain day in the future.
Articles of Incorporation
The Articles of Incorporation is a document that is filed by the individuals organizing the corporation. The Articles of Incorporation describe the purpose of the corporation as well as the share structure. The Articles will also list the names of the individuals who are acting as initial directors for the corporation. Any details of share transfer restrictions, and business activities will also be included in the Articles of Incorporation. The actual rules governing the management of the corporation is contained in a separate document called the Bylaws.
