Every dollar counts. This is especially true in the beginning stages of a business where opportunities are at every corner, but capital and resources are a bottleneck.
Innovation is important to society. When it comes to financially supporting innovation, the Canadian government and other organizations actually do walk the walk. The following is a list of programs that may prove useful to you in lowering the cost of entrepreneurship and the acquisition of formal intellectual property rights.
Federal Programs
IP Assist
IP Assist is a program intended to help Canadian small and medium-sized enterprises (SMEs) develop a better understanding of intellectual property and integrate IP into their business strategy. The program connects qualifying businesses with experienced IP professionals (such as patent agents, trademark agents, and IP lawyers) who provide advice, education, and strategic guidance.
To participate, a company must generally:
be a Canadian small-to-medium sized enterprise (“SME”) (typically fewer than 500 employees); and
be a client of the National Research Council of Canada Industrial Research Assistance Program (“NRC IRAP”), the federal program that supports R&D and innovation in Canadian businesses.
An IRAP Industrial Technology Advisor (“ITA”) works with the company and helps determine whether participation in IP Assist would benefit the firm. The ITA also acts as an intermediary between the company and the IP professionals involved in the program. The SME is matched with an appropriate IP professional who has expertise in the company’s industry (e.g., advanced manufacturing, ICT, biomedical technology, clean tech, etc.).
The IP Assist program is organized into three sequential levels: The first stage focuses on education and basic understanding of intellectual property. The second stage involves working with an IP professional to develop a formal IP strategy for the company. The third stage is intended to involve implementing the IP strategy developed in stage 2, such as executing the recommended IP actions.
Elevate IP
ElevateIPis a federally funded program launched by the Government of Canada to support startups and business accelerators/incubators (“BAIs”) in understanding and using IP strategically.
ElevateIP offers support in three tiers:
Tier 1 – Education and Awareness: Open to all registered startups at no cost, providing foundational IP knowledge. This tier includes workshops, programs, conferences, and peer-to-peer learning opportunities to provide foundational IP knowledge.
Tier 2 – Developing Strategies: Customized coaching and advisory services to create IP strategies tailored to each startup’s needs. Tools, coaching, and advisory services are provided to help startups identify gaps and create actionable IP strategies.
Tier 3 – Implementing Strategies: Assistance in executing IP strategies, including legal and advisory support, portfolio management, and monetization planning. This tier includes support for executing IP plans, including legal, advisory, and strategic services, with funding grants up to $100,000 for eligible startups.
Eligible applicants are Canadian startups working with BAIs that are part of the program network. BAIs include organizations like Communitech, Invest Ottawa, North Forge, Innovate Calgary, and others across Canada.
Industrial Research Assistance Program (“IRAP”)
IRAP, operated by the National Research Council of Canada (“NRC”), is designed to help SMEs in Canada develop and commercialize innovative technologies. The program provides financial contributions, expert advisory services, and access to R&D networks to accelerate business growth and innovation capacity.
IRAP reimburses a percentage of eligible costs after you incur them; you have to co-fund the remainder. The reimbursement model means you need working capital to pay staff and contractors before claiming the money back from NRC.
NRC assigns each client an Industrial Technology Advisor (“ITA”) – a professional that provides technical advice, business guidance, and connections to other programs.
IRAP currently operates four streams with different mandates, eligibility criteria, and budgets:
1. Core IRAP – The original program for general technology R&D across all sectors. Covers development of innovative products, processes, and services.
2. IRAP Clean Technology – Targets clean technology innovation that demonstrate measurable environmental benefit: greenhouse gas reduction, water conservation, waste diversion, or similar outcomes.
3. Defence Industry Assist (DI Assist) – Targets technologies with both commercial and defence applications (e.g., cybersecurity, autonomous systems, advanced materials, communications, and surveillance). Projects must demonstrate dual-use potential: commercial viability alongside defence relevance.
4.AI Assist – Targets natural language processing, computer vision, predictive analytics, and other AI domain technology. Projects must involve genuine AI development or significant AI integration — simply using off-the-shelf AI tools does not qualify.
MITACS
Mitacs is a non-profit national research organization that, in partnerships with Canadian academia, private industry and government, operates research and training programs in fields related to industrial and social innovation.
Mitacs offers several funding programs (such as Accelerate, Accelerate Entrepreneur, and the Globalink Research Award) tailored to the needs of businesses and researchers. These innovation programs support scientific research and experimental development through both public and private sector funding.
Scientific Research and Experimental Development (“SR&ED”) Tax Incentives
The SR&ED tax incentives are intended to encourage businesses to conduct research and development in Canada. Corporations, individuals, trusts, and partnerships that conduct eligible work may be able to claim SR&ED tax credits for the year when filing their income tax return for the year.
There are 2 tax incentives:
Claim a deduction against income
Earn an investment tax credit (“ITC”)
To benefit from these incentives, you must link your eligible work to expenditures you can claim.
SR&ED tax credits can be used together with grant programs. For example, a combination of an IRAP grant for financial support and application of a SR&ED tax credit against contributions is a common combination. IRAP provides upfront reimbursement during the project while SR&ED provides a retroactive tax credit on your co-investment after the fiscal year ends. Together, they can offset over 60% of total R&D costs. Nearly every IRAP-funded company should also be filing SR&ED claims as the two programs are designed to complement each other.
Speak with an accounting professional to learn whether SR&ED tax credits apply to you.
Provincial Programs
IP Ontario (“IPON”)
IPON is a provincial program that helps Ontario-based SMEs (i.e. under 500 employees) develop, protect, and commercialize IP. Focus sectors include AI, life sciences, MedTech, advanced manufacturing, etc.
The program is structured into two tiers:
Tier 1 – Foundational Support: This includes providing IP education in the form of courses and workshops, benchmarking tools, and coaching and advisory sessions. Some funding may be accessible at this stage for early IP strategy advising.
Tier 2 – Funding and Execution: This includes access to up to $100,000 per year for eligible IP expenses (such as legal fees and filing fees) for a lifetime cap of $300,000.
IPON has a cost-sharing model whereby IPON will cover up to 80% of eligible costs while the applicant is expected to cover at least 20% of the eligible costs and taxes.
The funding can be used for IP strategy development, patent/trademark registration, IP audits and surveys, and some legal agreements such as Non-Disclosure Agreements (NDAs) and licenses.
Provincial R&D credits
Provincial R&D credits may be claimed in addition to SR&ED tax credits for the year when filing the income tax return for the year.
For example, Ontario’s Innovation Tax Credit provides 3.5% on eligible R&D expenditures, while Quebec’s Scientific Research and Experimental Development Credit ranges from 14% to 30% depending on company size. Alberta, British Columbia, and other provinces have their own variations. These provincial credits apply to the portion of R&D expenses not already covered by federal programs, adding another layer to your total recovery.
Speak with an accounting professional to learn whether Provincial R&D credits that may apply to you.
Looking for ways to strategize the funding and growth of the IP portfolio for your start-up? Feel free to contact us to schedule a call with an IP professional. This content is for informational use only, does not constitute legal or professional advice, and does not establish a lawyer-client relationship. To obtain such advice, please communicate with our offices directly.
Some Patent Offices will provide discounts for government fees to small businesses as an incentive to facilitate access to intellectual property protection. Depending on the size of your company, you may qualify for such discounts as a “Small Entity.” In this article, we discuss the qualifications required to be considered as one of these discounted entities in Canada and in the U.S.
Canada
The Canadian Intellectual Property Office (“CIPO”) provides a 50% reduction in most government patent fees for applicants qualifying as a Small Entity.
Effective January 1, 2024, a “Small Entity” is defined in Canada as an applicant with fewer than 100 employees or a university. This classification does not include:
an entity that is controlled directly or indirectly by an entity, other than a university, that has 100 employees or more; or
an entity that has transferred or licensed, or has an obligation other than a contingent obligation, to transfer or license, any right in a claimed invention to an entity, other than a university, that has 100 employees or more.
A qualifying entity would be eligible for reduced patent fees upon submitting a Small Entity Declaration, signed by an authorized person, including a statement indicating that the applicant/patentee “believes that they are entitled to pay fees at the Small Entity level.”
Patent fees that are discounted for Small Entities include the application fee, maintenance fees, the request for examination fee, the final fee, and the fee for entering the national phase in Canada from a PCT application.
United States
The United States Patent and Trademark Office (“USPTO”) provides a 60% reduction in most government patent fees for applicants qualifying as a Small Entity.
A “Small Entity” is defined in the U.S. as a person, a small business (including affiliates, and having no more than 500 employees), or a non-profit organization anywhere in the world.
Additionally, a Small Entity must not have assigned, granted, conveyed, or licensed the invention, or be legally obligated to do so, to anyone who does not also qualify as a Small Entity.
Micro Entity
The USPTO also has a “Micro Entity” status with a further reduction in fees amounting to 50% of that paid by a small entity (in other words, an 80% reduction from the standard government fees). If you qualify as a Small Entity, you may also qualify for Micro Entity status if each inventor, patent applicant, or patent owner, as applicable, meets these additional criteria:
Was named as an inventor on four or fewer previously filed applications (stayed within the application filing limit);
Had an income for the previous calendar year of no more than the gross income limit $251,190 in 2025 and changing yearly); and
Has not assigned, granted, conveyed, or licensed the invention, or is legally obligated to do so, to anyone who exceeds the gross income limit
Even if you haven’t met all three criteria above, you may also qualify for Micro Entity status if you have received the majority of your income from employment by a U.S. institution of higher education, or have assigned, granted, or conveyed, or are legally obligated to do so, a patent ownership interest to such an institution.
Patent fees that are discounted for Small and Micro Entities include the basic filing fee, search fee, examination fee, excess claim fees, extension of time fees, the issue fee, maintenance fees, and the fee for entering the national phase in the U.S. from a PCT application.
Entity Status FAQs
If I am a Small Entity in Canada am I automatically a Small Entity in the U.S.?
No, not necessarily. The definitions of a Small Entity are not equal for CIPO and the USPTO, so it is possible to qualify as a Small Entity in one country but not qualify as a Small Entity in another.
Can I change my status from a Standard Entity to a Small Entity after I filed my patent application?
Yes, while the process to do so is slightly different for the USPTO than with CIPO, you can claim Small Entity status during the pendency of your patent application in either country.
I filed my patent application as a Small Entity, but my company grew while my patent application was pending and I no longer qualify as a Small Entity. Can I continue paying reduced fees as a Small Entity?
No, you cannot enjoy the reduction of fees intended for small entities if you no longer qualify as a Small Entity. While the process of changing entity status in each country is slightly different, you must pay the patent fees at the standard rate once you lose your Small Entity status. Failure to do so is serious and may result in losing patent rights for your invention.
Need assistance filing your patent application? Feel free to contact us and schedule a call with a patent professional. This content is for informational use only, does not constitute legal or professional advice, and does not establish a lawyer-client relationship. To obtain such advice, please communicate with our offices directly.
A U.S. provisional patent application (“Provisional Patent”) is a temporary patent filing administered by the United States Patent and Trademark Office (“USPTO”). It does not itself mature into a patent that could be eventually granted, but it does establish an early priority date for an invention should you wish to later file a regular patent application.
Some of the key takeaways about Provisional Patent to be mindful of include:
1. Provisional Patents expire 12 months from the date of filing. To retain the priority date benefit offered by the Provisional Patent, a regular patent application (“Regular Patent Application”) claiming the priority date must be filed during the 12-month window that the Provisional Patent is pending.
A Regular Patent Application is an application that does get examined and may proceed to become a granted patent. The Regular Patent Application can be a Canadian patent application for a protectable patent in Canada, a U.S. (non-provisional) patent application for a protectable patent in the U.S., or another country’s’ patent application for patent protection in that jurisdiction. Alternatively, you can file an “international patent application” or PCT application claiming the priority date of the Provisional Patent, from which multiple countries may be selected for pursuing patent protection.
2. Upon filing a Provisional Patent, you can claim/indicate “patent pending” status.
Being able to say your invention is “patent pending” has several practical effects beyond law. Amongst other benefits, competitors are put on notice to tread lightly by notifying the public that your invention is “patent pending.” Although patent rights do not exist until grant of the patent, competition may be deterred from investing in the manufacturing or supply chain of a product that will blocked off to them by your future patent.
3. Provisional Patents have no formal requirements regarding substance (i.e., they can be informal).
While you could file something as basic as your own notes on a scratch paper for a Provisional Patent, the substance of the disclosure in the Provisional Patent is important to maintain the priority date benefit for substance in the Regular Patent Application thereafter that claims the priority date benefit from the Provisional Patent.
In other words, the Regular Patent Application likely has written description and enablement requirements for the description of the invention. If the disclosure of the invention in the Provisional Patent (from which the Regular Patent Application claims the priority date) does not disclose the information necessary to meet the written description and enablement requirements of the Regular Patent Application, the priority date benefit will not be conferred due to the discrepancy of disclosure between the two applications. This is why its highly advisable to avoid this potential pitfall by filing a Provisional Patent that is as formal and comprehensive as possible, otherwise the entire benefit of filing a Provisional Patent for the priority date can be squandered.
4. Provisional Patents are not examined by Patent Examiners to ensure they meet the requirements for patentability.
Because Provisional Patents do not mature to granted patents, they do not need to be examined. This means that once you file a Provisional Patent, you can enjoy “patent pending” status while getting ready to file a Regular Patent Application by seeking funding sources, applying for grants, testing market demand, fine-tuning your design, etc.
5. Provisional Patents are generally less expensive to file than a regular patent application.
Patent filing fees for the USPTO and the Canadian Intellectual Property Office (“CIPO”) depend on the applicant/assignee’s “entity status” (i.e., the size of company and/or the entity’s financial position).
If one was to compare a ‘small entity’ filing of a Provisional Patent to a small entity filing of a Regular Patent Application in either the U.S. or Canada, they would find the Provisional Patent to be significantly less expensive to file:
Minimum Filing Fees to receive a filing receipt
Provisional Patent
Canadian Regular Patent Application
US Regular Patent Application
Small Entity*
$130 USD (178 CAD)†
241.24 CAD
$730 USD (1000 CAD) †
Standard Entity*
$325 USD (445 CAD) †
$595.06 CAD
$2000 USD (2738 CAD) †
* The entity rates posted are effective for 2026. Note that patent offices regularly update their fees.
† The US to CAD conversion rate used is based on the market rate of 1 USD to 1.37 CAD as of March 13, 2026.
6. Provisional Patents don’t get published.
Provisional Patents are not published by the USPTO. So, if you decide to abandon pursuing the patent protection for the invention before filing the Regular Patent Application, your disclosure in the Provisional Patent will not go public and you can retain the confidentiality of the invention. However, its important to note that if you decide to file the Regular Patent Application (which does get published) claiming the priority date benefit of the Provisional Patent, the entire prosecution file (known as the “file wrapper”) generally becomes public, and the Provisional Patent will typically be included in the file wrapper.
A Provisional Patent is a strategic legal instrument that allows inventors to establish an early patent priority date with relatively low cost and minimal formal requirements. It is frequently used when technology is still evolving, when public disclosure is anticipated, or when commercial development is underway. Compared with filing a Regular Patent Application immediately, a Provisional Patent provides time, flexibility, and cost management. Compared with relying solely on a Non-Disclosure Agreement (“NDA”), it offers something NDAs cannot: a place in the patent priority system.
For innovators operating in fast-moving technological fields, Provisional Patents applications serve as a critical bridge between invention development and formal patent protection.
Provisional Patent FAQs
When are Provisional Patents typically used?
Provisional Patents are commonly used during early stages of technology development when an invention has been conceptualized or reduced to practice, but further refinement or commercialization efforts are ongoing.
Typical circumstances include:
Early-stage innovation: when an inventor has developed a workable concept but expects design improvements over the next year.
Imminent public disclosure: when an inventor intends to present the invention at a conference, publish a paper, demonstrate a prototype, or pitch to investors.
Start-up formation and fundraising: when a startup wishes to secure a filing date before discussing technology with potential investors or partners.
Competitive technology sectors: in industries such as software, artificial intelligence, electronics, and biotechnology where rapid innovation makes priority dates strategically important.
Does Canada have a Provisional Patent equivalent?
The short answer is no.
While it is possible to mimic some of the benefits of a Provisional Patent with a Regular Patent Application in Canada, the practical effects of the Provisional Patent are not “one-to-one” with this kind of work around. For example, it may be possible to file a Canadian Regular Patent Application and never request examination to obtain “patent pending” status and secure a priority date without having to undergo examination of the invention by a Patent Examiner. However, as mentioned above, the Canadian Regular Patent Application will cost more than the Provisional Patent and will be published unless the Canadian Regular Patent Application is withdrawn before publication.
I have an NDA signed by everyone I disclose the invention to; do I still need a Provisional Patent?
Inventors sometimes rely on NDAs when discussing inventions with third parties. However, NDAs and Provisional Patents applications serve fundamentally different legal functions.
An NDA is a contractual obligation of confidentiality between specific parties, so its protection is limited in that (a) it only binds the parties to the agreement, (b) it does not prevent independent development by others, and (c) it does not create intellectual property rights in the invention. So, while an NDA can prevent a counterparty from disclosing confidential information, it does not secure patent priority.
If an invention is accidentally publicly disclosed, the inventor may lose foreign patent rights immediately and trigger statutory bars in some jurisdictions based on lack of novelty. A Provisional Patent filing provides protection by establishing a patent filing date before disclosure occurs regardless of whether an NDA has been signed by the disclosing party.
Moreover, many investors, manufacturers, and corporate partners refuse to sign NDAs at early stages due to exposure risks. Filing a Provisional Patent application allows an inventor to discuss the invention more freely while maintaining patent-pending status.
Nevertheless, the options of filing a Provisional Patent and executing an NDA are not mutually exclusive. In practice, NDAs and Provisional Patent applications are often used in tandem rather than as substitutes.
What if the design isn’t complete and I need to make modifications?
A Provisional Patent filing may include your current version of the invention, regardless of whether it is merely conceptual or has been prototyped.
If more versions or iterations are made before the filing of the Regular Patent Application, they may (a) be covered by their own subsequent Provisional Patents which can all be claimed by the Regular Patent Application or (b) be included in the filing of the Regular Patent Application. The decision to file subsequent Provisional Patents as in (a) indicated above or wait for the filing of the Regular Patent Application as in (b) indicated above is mainly based on how important it is to obtain a priority date for each successive version/iteration of the invention.
Why is there such a wide range of fees for preparing and filing a Provisional Patent?
As mentioned above, Provisional Patents have no formal requirements regarding substance and can be as basic as your own notes on a scratch paper.
Some online companies capitalize on this fact by automatically filling out a Provisional Patent application directly based on information you provide on a form without requiring review of the substance of the application by a patent lawyer. As such, the company does not have to incur the legal costs of the lawyer’s drafting or review time and is able to offer a very competitive rate.
However, as the adage goes, “you get what you pay for.” Remember that the substance of the disclosure in the Provisional Patent is important to maintain the priority date benefit for substance in the Regular Patent Application that is claiming the priority date benefit. So, if you later decide to file a Regular Patent Application claiming the priority date benefit from the Provisional Patent and the disclosure of the invention in the Provisional Patent is not sufficient to meet the written description requirements for the Regular Patent Application, the priority date benefit will not be provided to the discrepancy of disclosure between the two applications.
Need assistance building your patent portfolio? Feel free to contact us to schedule a call with a patent professional. This content is for informational use only, does not constitute legal or professional advice, and does not establish a lawyer-client relationship. To obtain such advice, please communicate with our offices directly.
Franchise disclosure is one of those topics every franchisor thinks they understand, until they realize the rules aren’t quite as black and white as they seem. In Canada, only the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Ontario, Prince Edward Island, and soon, Saskatchewan, require franchisors to provide a disclosure document.
But even in Ontario, the Arthur Wishart Act (Franchise Disclosure), 2000 (“AWA”) includes several instances where disclosure may not actually be required.
In plain terms: sometimes the obligation to disclose simply doesn’t apply at all (these are exclusions), and in other cases, franchisors are legally allowed to skip disclosure in specific situations (these are exemptions).
Why It Matters
Getting this wrong can cause more than just a paperwork headache. Missteps can delay closings, invite rescission claims, and leave both parties in a tricky position-imagine paying rent on a location you can’t yet operate because the cooling-off period hasn’t expired. On the flip side, properly relying on an exclusion or exemption keeps transactions efficient and compliant, while still protecting everyone involved.
That’s why clear legal guidance is essential. A franchise lawyer can confirm whether disclosure is required, explain how exclusions and/or exemptions apply, and help avoid pitfalls that could derail a deal.
The Key Categories
Exclusions – The AWA doesn’t apply at all in these cases:
Certain employment or partnership relationships
Trademark or certification-style licensing arrangements
Shared retail spaces where the smaller tenant isn’t required to buy from the larger retailer
Agreements involving the Crown or its agents
Exemptions – Disclosure rules apply generally, but these scenarios are excused:
Short-term or small-investment franchises (less than one year or under $15,000)
Large initial investments over $3 million
Experienced insiders or existing franchisees expanding their operations
Multi-level marketing structures
Franchise renewals or extensions
Estate sales or bankruptcy proceedings
Existing franchisee acquiring another unit
A sale of a franchise by an existing franchisee for the franchisee’s own account, where the franchisor’s involvement is limited and specified conditions are met.
The Takeaway
Relying on an exemption doesn’t mean a franchisor is cutting corners! It means they’re operating within the law’s boundaries. Still, many choose to disclose anyway for transparency, consistency, and peace of mind.
When in doubt, consult a franchise lawyer early. Understanding when disclosure isn’t required can be just as strategic as knowing when it is.
This article was first published on February 25th 2026 on elitefranchisemagazine.com
The relationship between Franchisors and Franchisees is focused on two related principles: (1) Franchisors grant rights to Franchisees to operate a business, and (2) Franchisees pay Franchisors to continue using the granted rights. Rights that are granted by Franchisors are, amongst other things, the use of a trademark, tradename, symbol, or logo that is owned or licensed by the Franchisor. It is at this initial point that franchise law intersects with trademark law, and it continues to be an important foundation for franchise system success for all parties throughout the franchise relationship.
At the outset, it is important to note that you cannot grant rights that you do not own or have the legal right to grant. Before Franchisors can grant any rights to Franchisees, they must have the legal authority to do so. More often than we like to see, Franchisors file trademark applications with the Canadian Intellectual Property Office (“CIPO”) without professional assistance. This is generally the first mistake, which then compounds other complications. It is rare that trademark applications filed without the assistance of a trademark lawyer or agent do not contain fundamental flaws that make them difficult to enforce down the road.
Compounding these flaws, Franchisors often assume that the mere filing of a trademark application means they have registered trademark rights. After filing, many Franchisors are unaware that there are several additional steps in the trademark prosecution process. Failure to respond properly to requests from CIPO Examiners frequently results in abandonment of the application.
Even where trademarks are not registered, rights may still arise through use. However, enforcing unregistered trademarks creates its own complications. In many cases, where marks have not been properly cleared, Franchisors may unknowingly use a trademark that is confusingly similar to another company’s registered or unregistered mark that has been in use for a longer period of time.
If a Franchisor has a registered or unregistered trademark as part of its franchise system and intends to grant such rights through the Franchise Disclosure Document (“FDD”), it is crucial that the trademark be searched and cleared prior to use, and that an application for registration be filed. Without proper review, particularly for unregistered trademarks, Franchisors face significant legal and financial risks, including:
Risk of Forced Rebranding:If trademarks are found to be unregistrable or unenforceable, Franchisors may be forced to rebrand their entire system, resulting in significant costs for both the Franchisor and its Franchisees.
Risk of Trademark Infringement:Failure to clear a trademark may result in infringement claims from third parties with prior rights. Such claims may need to be disclosed as a material change, creating additional legal and administrative burdens and potentially discouraging prospective Franchisees.
Risk of Rescission:Where a Franchisor fails to properly disclose trademark status or material changes within the required timeframe, Franchisees may have the right to rescind the franchise agreement. Rescission can be severe, requiring the Franchisor to refund fees, repurchase inventory, and compensate for losses, including lost wages.
It is no coincidence that trademark and franchise departments within law firms work closely together. These two areas of law are truly complementary—two peas in a pod. Conducting a thorough trademark review of a franchise system and understanding a Franchisor’s trademark portfolio prior to preparing the FDD is essential to building a strong, compliant franchise system with minimal legal risk.
This article was first published on 9 January 2026 on elitefranchisemagazine.com
Minute books often tell the full story of a Company from its incorporation date to the present day. This includes all records of meetings, identities of the shareholders, directors and officers, any government filings and information on who holds significant control of the Company.
Despite this importance, a lot of Company owners do not know what a minute book is, where it should be kept or the importance of ensuring that it remains up to date. Company owners only realise the importance of a current minute book when it is requested for due diligence purposes by an interested buyer or when they are rushing to close a transaction that involves the shares or assets of the Company. This places unnecessary pressure on the Company and its solicitor to quickly update and/or create a minute book prior to closing.
What is a Minute Book?
A Minute Book is a physical or digital/electronic collection of all the key legal, regulatory and administrative records of a Company. Section 140 of the Ontario Business Corporations Act (“OBCA”) provides that every Company in Ontario must maintain a minute book at the registered office of the Company or any other place designated by the Board of Directors.
Contents of a Minute Book
Minute books in Ontario must contain the following information (Section 140-141 of OBCA):
A copy of any unanimous shareholder agreement;
Articles of incorporation;
By laws of the Company and any amendments;
Minutes of meetings and resolutions of shareholders;
A register of all the directors including their full names and addresses;
Securities register;
New and cancelled share certificates;
Share transfer registers;
Shareholder loan registers;
Annual returns and filings;
Notices of change (Address, Directors and Officers);
Dividend payout register;
A register of all ownership interests in land identifying each property in detail and showing the date of acquisition of the property;
Register of individuals with significant control
When is it Crucial to have a Minute Book?
Business Transactions: As part of share or asset sales/purchase transactions or bringing in new investors, a minute book is often one of the first items that will be requested from a Company as part of due diligence. Not having a minute book may delay the transaction or lead to the potential investor losing interest in the deal.
Banking and Lending: Banks and lenders often request a copy of the minute book of a Company prior to approving any funding.
General Compliance and Accountability: Any time there is a change in the status, share structure, officers/directors/shareholding of the Company, the minute book should be updated to reflect the change contemporaneously.
Regulatory Access: The OBCA provides for law enforcement, tax authorities or a regulatory body to be able to obtain access to some documents contained in a minute book, particularly the register of individuals with significant control.
Having and maintaining your Company’s minute book may initially seem like an added cost of doing business but it is a necessary one–the cost of not having an update minute book is often more than the cost of having one and can make a Company unattractive to potential investors or major lenders. It is also required by law to have and maintain a minute book. Our Corporate Team can provide their legal support to help you create and maintain your minute book to ensure the Company is compliant and ready to transact.
