RECO / TRESA · Business & conduct
The restriction on business authorises trading in real estate or acting as a brokerage
What the check looks for
A PREC is exempt from registration under TRESA, and it keeps the exemption only if it does not carry on the business of trading in real estate, other than providing the controlling shareholder's services to their brokerage, and does not carry on business as a brokerage. The regulation does not require a business restriction in the articles, but putting one there is recommended drafting practice.
Authority: O. Reg. 536/20, s. 3 ¶¶2 and 4 (business and brokerage)
What goes wrong
The restriction is drafted as a carve-out ("cannot carry on a business other than …"), and what it AUTHORISES includes operating as a real estate agent or broker. A PREC is exempt from registration under TRESA only if it does not carry on the business of trading in real estate, other than providing the controlling shareholder's services to their brokerage, and does not carry on business as a brokerage. Read literally, the articles authorise conduct that would cost the corporation that exemption.
Check your own articles, free
The PREC Articles Health Check reads your articles of incorporation in your own browser and rates them Red, Yellow or Green against this criterion and 29 others. The check does not upload your document to us.
It reads how the articles are drafted; it does not advise on your circumstances, and Capital Toolkit does not file articles with the Province.
Capital Toolkit is an automated service. It provides general information, not legal, tax or accounting advice, and it does not replace your own lawyer or accountant. Have a qualified professional review any document before you rely on it, sign it or file it.