Posted by Darryl Aarbo — filed in Business Law
Oftentimes, once a corporation is established and running, the corporation’s structure may not be reviewed on a regular basis. This can be problematic especially when a corporation is trying to do something that it is not allowed to do pursuant to its Articles of Incorporation or any other agreements that dictate the management of the Corporation. For instance, if a corporation is contemplating a share transaction or amending the number of directors in the corporation.
The Articles of Incorporation is one of the primary documents that govern how a corporation is structured. In a nutshell, the articles of incorporation is a document that specifies the corporate name, the share structure, the rights and privileges of such shares, whether the transfer of shares is to be restricted, the number of directors, and any restrictions on the business that the corporation my carry on. Similarly, if the corporation has a shareholder agreement, this may also dictate how the corporation is to be managed.
Generally, if you want to amend the share structure of your corporation, such as issuing new shares or even issuing a new class of shares, then you should revisit your corporation’s Articles of Incorporation or any other agreement that would affect how your corporation is run. This is important because these documents will specify the number and classes of shares available and whether particular share transactions are restricted.
If your corporation’s Articles of Incorporation or other documents governing the management of the corporation do not allow for the changes that you are contemplating, then you may want to seek the services of a lawyer and consider amending them.
By Christina Dao of Aarbo Fuldauer LLP
If you have a legal issue that you need reviewed by a lawyer, please contact the law office of Aarbo Fuldauer LLP at:
Address: 3rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4
Phone: (403) 571-5120