Organizing the Corporation

Once the corporation has been incorporated and the Articles of Incorporation have been issued by the relevant government department or authority, the next step involves formally organizing the corporation.

All of the required steps to organize your corporation will have been performed by the time you have received your corporation's Articles of Incorporation, its minute book and all other required documentation (corporation's by-laws, organization resolutions etc.) from The remaining task will be for you, and the other directors, and shareholders, if any, to sign the relevant resolutions, share certificates, minutes and other documents. All such documents will clearly indicate where each person must sign.

As such, the following information is provided for your own knowledge to better understand the organization and workings of a corporation.

Organization Meeting

The directors of the corporation must hold an organization meeting. The meeting can be called by an incorporator or a director and it is recommended that it be held as soon as possible. Each director must be notified in writing in advance of the date, time and place of the meeting.

At this meeting, the directors are typically required to issue at least one share and they can also perform the following:

  • make general by-laws;
  • appoint officers;
  • adopt banking arrangements;
  • adopt a corporate seal, if necessary;
  • set the fiscal year; and
  • approve the form of the share certificate for each class of share.

General by-laws

The general by-laws of the corporation govern the day-to-day activities of the corporation. The by-laws vary depending upon the corporation, but in general they deal with matters such as the registered office, corporate seal, fiscal year, authority to dispose of securities, borrowing powers and general information concerning the officers, directors, shareholders meetings, transfer of shares, payment of dividends, loans and notice requirements. The by-laws must be ratified by a resolution of the board of directors. As soon as the resolution is adopted, the by-laws come into effect.

The by-laws (with the exception of the various provisions relating to the agents, officers and servants of the corporation) will only have effect until the next annual shareholders meeting of the corporation, unless they are ratified in the meantime by a general meeting of the corporation. If the by-laws are not confirmed at the annual meeting, they will cease to have effect from that date.

Shareholders only have the option to ratify or not to ratify the by-laws adopted by the board of directors. The shareholders cannot repeal, amend or modify the by-laws in any way since this is in the sole discretion of the directors.

Appoint Officers
Directors appoint the officers, who are in turn responsible for managing the day to day affairs of the corporation.

An officer can also be a director of the corporation and he/she can be paid a salary for the work he/she does as an officer.

Adopt Banking Arrangements

Despite the fact that the general by-laws include rules regarding the execution of documents and the borrowing of money by the corporation, a specific banking by-law and banking resolution must be adopted by the board of directors by way of a resolution. The resolutions should be adopted at the time of organization in order to enable certain officers to sign on behalf of the corporation. In most cases, the president alone or the president and the secretary are given this authority. The banking resolution and by-law can vary depending upon the needs of the specific corporation involved. Nevertheless, each financial institution has its own pre-printed resolution and by-law which are sufficient in most cases.

A certified copy of both the borrowing by-law and the banking resolution must be delivered to the financial institution with which the corporation will do business.

Adopt a Corporate Seal
A corporation is not obliged to adopt a corporate seal since no document is ever said to be invalid simply because a corporate seal is not affixed to it. If, however, a corporation decides to adopt a corporate seal, the directors must indicate their approval in a resolution.

Set the Fiscal Year

A corporation is free to choose any date as the end of its fiscal year. Regardless of the year end that a corporation chooses, every corporation must file its annual filing with the relevant government body or department within the prescribed dates.

Approve the Form of the Share Certificates

A sample of each share certificate to be used for each class of share is prepared, the word "specimen" is printed on its face and the certificate is inserted into the corporation's minute book. The directors must then approve the form of the share certificates in a resolution.

Corporation's Books

A corporation is required to keep a book at its registered office which contains the following information:

  1. its articles, by-laws, unanimous shareholders agreement or any written agreement by a sole shareholder restricting the powers of the directors;
  2. minutes of meetings and resolutions of the shareholders;
  3. full name of each director and the date on which the term of office of each director begins and ends;
  4. minutes of meetings and resolutions of the board of directors and the executive committee;
  5. names in alphabetical order and last known addresses of persons who were or are presently shareholders;
  6. number of shares held by these persons;
  7. date and details of the share issue and transfer of each share; and
  8. amount due on each share, if any.

The shareholders, but not the creditors, can consult the entire book with the exception of the information relating to the board of directors and the executive committee meetings and resolutions. Only the directors and auditors have access to this information, unless the shareholders acquire this right from the directors as a result of a unanimous shareholders agreement. Shareholders are also entitled to obtain from the board of directors, free of charge, a copy of the corporation's Articles of Incorporation, by-laws and any unanimous shareholders agreement.

Corporation's Registers
Once the corporation has been organized, the various registers found in the corporation's minute book must be completed.

Directors Register
This lists the names of all the directors along with their addresses, the date on which they became a director and the date on which they ceased to be one.

Shareholders Register
Entered in this register is the name and address of every person who holds shares in the corporation, along with the date on which they became a shareholder and the date on which they ceased to be one.

Share Register
This lists in alphabetical order the name and address of each shareholder for each class of shares, along with the date on which the shares were purchased, the share certificate number, the price paid for each share, the total amount paid and the aggregate number of shares held by each shareholder.

Share Transfer Register
Entered in this register are all stock transfers that have taken place over time, including the number and date of the transfer, the name of the transferor and transferee, the number of shares transferred and both the certificate number that was cancelled and issued.