RECO / TRESA · Share ownership
The articles contemplate share ownership the regulation does not permit
What the check looks for
Non-voting shares may only be owned, directly or indirectly, by the controlling shareholder or a family member (spouse, child or parent), or owned legally by one or more individuals, as trustees, for the controlling shareholder's minor children.
Authority: O. Reg. 536/20, s. 1 ("family member"), s. 2 ¶5
What goes wrong
The articles do not restrict who may hold the non-voting shares, and item 9 carries standard private-issuer wording that refers to accredited investors, consultants, or officers and employees of affiliated entities. That wording comes from securities law and is not a breach in itself, but O. Reg. 536/20 s. 2 ¶5 limits who may own a non-equity share to the controlling shareholder or a spouse, child or parent (directly or indirectly), or one or more individuals, as trustees, for minor children. A transfer list wider than that should be narrowed so it cannot be read as permitting anyone else.
What good looks like
The articles limit the non-voting shares to holders permitted by the regulation.
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.