Every corporation has at least one shareholder. Shareholders own the corporation by holding equity or “shares” in the corporation. But generally (especially in larger companies), shareholders do not actually run the corporation. Instead, they elect one or more directors to a “board of directors” which oversees the business and affairs of the corporation. In turn, directors appoint officers (such as the CEO) to manage the day-to-day business of the corporation. See here and here for what it means to be a director and an officer of a corporation.

When you incorporate your business with SkyLaunch, our curated incorporation package will include all the necessary documentation and approvals to get you set up initially as the sole shareholder, director and officer of your corporation.

As we discuss in “Why Should I Incorporate My Business?” here, the shareholders of an incorporated business are usually not liable for the corporation’s debts and a shareholder’s personal assets generally cannot be seized to settle claims against the corporation. This added layer of liability protection is not available to sole proprietorships, where the business and its owner are one and the same.

Shareholders are entitled to the property and assets of the corporation at the end of its life-cycle (e.g., when it is wound up or dissolved), after making sure that all outstanding debts owed to creditors are settled.

Generally, every corporation has at least one class of common shares. It is possible to create different classes of shares such as “preferred shares” or “non-voting shares”. Shareholders holding different classes of shares will have different voting rights and different entitlements to the corporation’s assets on dissolution. SkyLaunch’s curated incorporation package will initially establish a single class of standard common shares, with you as the sole shareholder.

If you want to invite additional shareholders to join you or create different classes of shares, you should discuss with a lawyer first. When adding another shareholder, you should have a shareholder agreement in place and get tax advice to make sure everything is set up correctly right from the get-go. See how SkyLaw can help!

At the end of each financial year, each corporation must file an "annual return" with the business registry (NB: this is separate from and in addition to any tax returns that the corporation may need to file), and shareholders must meet and pass certain “annual resolutions” to, among other things, elect directors for the upcoming year and approve the corporation’s financial statements. If you opt to become a SkyLaunch Member, we can help you with these annual resolutions and annual return filings.

Are you ready to become a shareholder of your own corporation? If so, click here to get started today!