It is commonly understood that minority shareholders have certain protections under the Business Corporations Act. This includes the right to dissent on a vote to approve certain significant corporate events, such as an amalgamation of the company or the sale of all of its property. The requirements for such a dissent are in section 185 […]
Category Archives: Shareholder Disputes
Shotgun Clauses in Shareholder Agreements
As investors with a say in all major business decisions, shareholders hold the bulk of power when it comes to how a company is run. The ability of shareholders to work together effectively is vital to a company’s day-to-day operations. When shareholders find themselves in a dispute, it must be resolved as quickly as possible, […]
Rogers Communications Facing Ongoing Strife After Ousting Director
The internal workings of Canadian telecom giant Rogers Communications have been the source of many headlines over the past week, after an attempt to shuffle the corporate leadership failed. Now, the various directors of the company are engaged in an ongoing dispute that could have long-term ramifications for the company’s shareholders and public reputation. Not […]
Cannabis Company Facing Class Action & Fraud Charges
One of the benefits of incorporating a business is the corporation becomes an entity unto itself, meaning the officers and directors are generally shielded from personal liability should something go wrong. However, this isn’t always the case, depending on the specific issue. As demonstrated by the ongoing trials and tribulations faced by an Ontario-based cannabis […]
Changes Coming to Business Corporations Act in July
There are changes taking effect to Ontario’s Business Corporations Act on July 5th, aimed at eliminating certain requirements in an attempt to make it easier for organizations in Ontario to do business. The changes come as part of Bill 213, the Better for People, Smarter for Business Act, which received royal assent near the end […]
The Importance of a Comprehensive Shareholder Agreement
The existence of a carefully thought-out shareholder’s agreement can go a long way to avoiding costly and time-consuming litigation. Shareholder agreements can set out the terms for various transactions in advance, determine how shareholders and directors are appointed, and a variety of other issues that will be faced by most shareholders over a corporation’s lifetime. […]
Shareholder Disputes Expected to Rise in Canada’s Cannabis Industry
When cannabis was legalized in Canada in 2018, many people, including financial investors, assumed the industry would be a nearly foolproof opportunity. However, due to a sudden rise in class-action lawsuits in Canada and the U.S., many shareholders are facing an unexpected devaluation of stock. Some people believe this could lead to an increase in […]
The Rule in Foss v. Harbottle
The rule in Foss v. Harbottle is well established in Ontario law. The rule prevents shareholders from suing for a loss in the value of their shares brought about by a wrong done to the corporation. The rule is a consequence of the separate legal personality of the corporation. Just as shareholders (subject to limited […]
Oppression Claims & The Business Judgment Rule
Oppression is defined under the Ontario Business Corporations Act as conduct that is “oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation”. This conduct does not need to be illegal so long as it fits the definition set out in the legislation. […]