Calgary Corporate Amendments Lawyer

Contact Neufeld Legal PC for your incorporation legal work at 403-400-4092 or Chris@NeufeldLegal.com

With a corporation's Articles of Incorporation being the foundational legal documents that establish a corporation's existence and structure, and having been filed with the Government of Alberta (or the federal government in the case of a federal corporation), to make changes to these foundational legal documents, it is necessary to prepare and file Articles of Amendment with that same government.

Amending a corporation's existing Articles of Incorporation (or Articles of Amendment, where subsequent changes are being undertaken) may be undertaken to:

A. Change the Corporation's Name

  • This is one of the most common reasons. If the corporation decides to operate under a new legal name, the Articles must be amended to reflect this change. This often requires a NUANS report for the applicable jurisdiction to ensure the new name is available and not too similar to existing names.

B. Changes to Share Capital

  • Adding or removing classes or series of shares: As a company grows or takes on new investors, it might need to create different types of shares (e.g., common shares, preferred shares, voting, non-voting) with varying rights, privileges, restrictions, and conditions.

  • Increasing or decreasing the maximum number of shares the corporation is authorized to issue: This is crucial for fundraising (issuing more shares) or for share buybacks.

  • Changing the rights, privileges, restrictions, and conditions of existing share classes: For example, altering dividend entitlements, voting rights, or rights upon liquidation.

C. Changes to the Business Purpose or Restrictions on Activities

  • If the corporation significantly changes its core business activities or wants to add or remove restrictions on the type of business it can carry on, the Articles must be updated to reflect this. This is particularly important if the company is moving into regulated industries.

D. Changes to the Number of Directors (or minimum/maximum number)

  • If the corporation wants to change the range or fixed number of directors that will govern it, an amendment is needed.

E. Adding or Removing Restrictions on Share Transfers

  • For private corporations, restrictions on the transfer of shares are often included in the Articles to control who can own shares in the company. If these restrictions need to be changed or removed, an amendment is required.

F. Correcting Clerical Errors

  • Simple mistakes or omissions in the original Articles may need to be corrected through an amendment.

Why is it important to amend your Articles of Incorporation (or Articles of Amendment)?

  • Legal Compliance: The Alberta Business Corporations Act (and the Canada Business Corporations Act for federal corporations) requires that certain fundamental changes be undertaken by way of filed Articles of Amendment. Failing to do so can result in penalties, administrative dissolution, or loss of "good standing" with the corporate registry.

  • Maintaining Legal Protections: The Articles of Incorporation are public record. Keeping the corporation's Articles up-to-date ensures that the legal protections afforded by incorporation (like limited liability) are maintained and that third parties (banks, investors, suppliers, customers) have accurate information about the corporation.

  • Facilitating Business Operations: Inaccurate or outdated Articles can cause issues with banks, investors, or when seeking licenses and permits. They ensure that internal corporate records align with how the business currently operates.

  • Shareholder and Stakeholder Rights: Clear and updated Articles protect the rights of shareholders and other stakeholders by defining their entitlements, voting rights, and the corporation's operational framework.

  • Investor Readiness: Sophisticated investors will scrutinize a corporation's corporate documents. Updated and well-structured Articles, especially concerning share capital, are essential for attracting and securing investment.

  • Avoiding Disputes: Ambiguity or outdated information in the Articles can lead to internal disputes among shareholders or directors.

As a corporate business lawyer, I have been dealing with the corporate law and business matters for over a quarter century, and understand the importance of asking the appropriate questions, and follow-up questions, such that we might properly maintain the structure of an incorporated business and undertake the amendment of the corporation's Articles when required.

If you are looking for a business incorporation lawyer in Calgary, serving businesses throughout the province of Alberta and beyond, we welcome you to contact our law firm at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule an initial consultation and learn more about our law firm's business incorporation legal practice.

 

Considerations before Incorporating a Company