Entrepreneurship & Small Business

Share structure and Incorporation?

  • Last Updated:
  • Dec 7th, 2018 8:56 pm
[OP]
Newbie
Aug 29, 2018
6 posts

Share structure and Incorporation?

I'am in construction and sell spec houses.My accountant tells me i need to incorporate before i start my next house,and I also should do it for liability reasons.I have spoken with lawyers in my area about this and none of them would be able to do it till the third week in Dec as things are busy here and i need this done ASAP.
I need to have class A shares with voting rights for myself,Class B shares with no voting rights for myself for dividends and class C shares with no voting rights for my wife for dividends.


When i get to the share section of the online incorporation is where i get confused on how to set them up.Do all shares get a par value?Or just the class A voting?
Would they be set up like this?Say 100 of each class.
Class A shares, Voting,par value $1, in my name.
Class B shares, non-voting. par value $1, in my name.
Class C shares,non-voting,par value $1,in wifes name.

Thanks
7 replies
Deal Addict
User avatar
Aug 15, 2015
1189 posts
152 upvotes
Markham, ON
Are you sure you cannot remain silent on the par value? As in no particular value is assigned?
Deal Guru
Aug 2, 2010
12932 posts
3231 upvotes
Here 'n There
Your lawyer, not accountant, should be the one advising about whether you should incorporate or not, but I agree that it's a good idea from a liability point of view. Some contractors set up a separate corporation for each project in order to limit exposure to the assets of that particular project to claims. Of course contractors insurance should cover some or all of your liability, depending on the situation, if worst comes to worst.
Member
Nov 12, 2014
476 posts
275 upvotes
Kingston, ON
eonibm wrote:
Dec 5th, 2018 8:13 am
Your lawyer, not accountant, should be the one advising about whether you should incorporate or not, but I agree that it's a good idea from a liability point of view. Some contractors set up a separate corporation for each project in order to limit exposure to the assets of that particular project to claims. Of course contractors insurance should cover some or all of your liability, depending on the situation, if worst comes to worst.
It's a joint effort actually. The accountant would be able to tell if there are any tax advantages; the lawyer if there are any legal advantages. Even a kindergartner would know that.
[OP]
Newbie
Aug 29, 2018
6 posts
Poppwl wrote:
Dec 5th, 2018 12:33 am
Are you sure you cannot remain silent on the par value? As in no particular value is assigned?
Yes I could, .Is there an advantage to not setting a minimum value?
Deal Guru
Aug 2, 2010
12932 posts
3231 upvotes
Here 'n There
QN5252 wrote:
Dec 5th, 2018 8:28 am
It's a joint effort actually. The accountant would be able to tell if there are any tax advantages; the lawyer if there are any legal advantages. Even a kindergartner would know that.
Yes but even a kindergardener could read that you wrote that the accountant suggested it for 'liability reasons', not for tax reasons. The accountant should stick to tax reasons and leave the liability advice to the lawyers as I advised.
[OP]
Newbie
Aug 29, 2018
6 posts
Sorry for my bad grammar.I should of put a period after the second sentence.My accountant suggested it for tax purposes.And I wish to do it for liability as advised by a lawyer.Sorry for the confusion.
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User avatar
Aug 15, 2015
1189 posts
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Markham, ON
millrat999 wrote:
Dec 5th, 2018 10:09 am
Yes I could, .Is there an advantage to not setting a minimum value?
I don't know. I guess it's your decision. You can have some classes with par value and some without par value and then ask how you can use this difference to your advantage or when you can use the difference to your advantage. Maybe you may never end up using them at all because you never end up meeting the conditions.

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