| Every businessman understands that Corporation is a | | | | feature of preferred shares is a wide array of |
| completely normal step in the development of his | | | | potential preferences over common shareholders. This |
| business. Other forms of partnership like joint ventures | | | | type of shares is often used to attract additional |
| not so many potential advantages as the corporation | | | | capital to Canadian Corporations. Very often the |
| so at certain moments of business development | | | | holders of these shares have a priority on the return |
| starting a corporation is a great solution. After creation | | | | of paid up capital in the event of the winding up or |
| of your corporation you need to solve a number of | | | | dissolution of the Corporation. Also the holders have |
| serious questions, set up and organize your corporation | | | | the right to receive a dividend at fixed, or floating |
| properly to create an effective and profitable | | | | amounts, and a right of redemption, under this right the |
| corporation. An experienced corporate lawyer is | | | | Corporation is required to buy back the shares from |
| usually the person who will help you the most. Naturally | | | | the holders. |
| the most important things in any corporation are | | | | After you chose the type of shares choosing who will |
| shares. When you establish a corporation you need to | | | | participate in your corporation is the second important |
| specify the class of shares. There are three classes | | | | question. There is always a possibility to offer |
| of shares: voting common shares, non-voting common | | | | participation to unknown investors, but very often it is |
| shares and preferred shares. Most of the corporations | | | | overpowered by the temptation to include family |
| in Canada are created with a single class of Common | | | | members and loved ones as Shareholders, Directors |
| Voting Shares. | | | | or Officers in a Corporation. In some cases building |
| Voting Common Shares | | | | your corporation on family bonds is a good decision, |
| The holders of common shares usually can elect a | | | | but sometimes if you family has a part of shares they |
| Board of Directors, which will run the corporations, by a | | | | can influence the board of directors and block their |
| simple majority. They also have the right to alter the | | | | decisions if they disagree with you. Also choosing |
| Memorandum, Articles or Bylaws of a Corporation and | | | | partners is a very important decision. As a sad |
| are entitled to participate in distribution of profits of the | | | | example Steve Jobs, the founder of Apple was fired |
| Canadian Corporation. | | | | from the corporation by the Board of Directors in the |
| Non-Voting Common Shares | | | | early 90th. The third important moment in creating a |
| Holders of non-voting common shares are like the | | | | corporation is capitalization. Funds can be obtained |
| holders of voting common shares to participate in | | | | from various sources like investment or loans from |
| distributions of profits of the Corporation, but they have | | | | Shareholders or Corporation Borrowing for example. In |
| no right to vote. | | | | each of these types the young corporation borrows |
| Preferred Shares | | | | money and then repays it from profits. |
| This class can be voting or non-voting. The main | | | | |