TABLE OF CONTENTS

Volume 1

Chapter 1Choice of Business Form

1:10 Introduction .............................................................. 1-11:10.10 Types of Business Forms.................................. 1-11:10.20 Factors to Consider.......................................... 1-1

1:20 Business Name .......................................................... 1-3

1:30 Sole Proprietorship .................................................... 1-7

1:40 Partnership ................................................................ 1-91:40.10 Tax Considerations .......................................... 1-221:40.20 Income Tax Folio SF-F16-CI What is a

Partnership? ..................................................... 1-251:40.30 Partners may bind each other........................... 1-301:40.40 Dissolution....................................................... 1-321:40.50 Non-Competition Clause.................................. 1-42

1:50 Limited Partnership ................................................... 1-461:50.10 Participation by a Limited Partner in

Management .................................................... 1-491:50.20 Structure of Limited Partnership ...................... 1-501:50.30 Name of Limited Partnership ........................... 1-53

1:60 Joint Venture............................................................. 1-54

1:70 Corporation............................................................... 1-671:70.10 Economic Tort Liability ................................... 1-106.1

1:70.10.10 Conspiracy-Related Liability ................... 1-106.11:70.10.20 Defamation ............................................. 1-1571:70.10.30 Other Economic Tort Liability ................ 1-183

1:70.20 Liability of Directors and Officers .................... 1-1971:70.30 Bankruptcy and Insolvency .............................. 1-3181:70.40 Payroll Source Deductions ............................... 1-326.31:70.50 Relief Under Taxpayer Relief Provisions

Under the Income Tax Act ............................... 1-344.51:70.60 Quasi-Criminal Consequences under the

Income Tax Act................................................ 1-354.11:70.70 GST/HST Remittances..................................... 1-3581:70.80 Relief Under Taxpayer Relief Provisions

Under the Excise Tax Act .................................. 1-378.21:70.90 Advantages ...................................................... 1-3811:70.100 Disadvantages .................................................. 1-3841:70.110 Personal Service Business (PSB)

Corporation ..................................................... 1-3851:70.120 Federal Corporation Changes........................... 1-389

B.L.A. C-1 February 2019

1:70.120.10 Directors residency.................................. 1-3891:70.120.20 Directors’ Liability .................................. 1-3901:70.120.30 Proportionate Liability ............................ 1-3911:70.120.40 Financial Assistance ................................ 1-3911:70.120.50 Corporate Records .................................. 1-392

1:80 Business Trust ........................................................... 1-392

1:90 Franchise................................................................... 1-394.2

1:100 Criminal Liability of Businesses ................................. 1-438.111:100.10 Occupational Health and Safety Duty .............. 1-438.111:100.20 Organizational Criminal Liability ..................... 1-438.171:100.30 Contingency Fees ............................................. 1-4471:100.40 Information Circular 89-2R3 ............................ 1-4491:100.50 Information Circular 07-1 ................................ 1-4631:100.60 Information Circular 00-1R4 ............................ 1-5211:100.70 Information Circular IC98-1R4 ........................ 1-5371:100.80 Ontario Business Registration Application ....... 1-5501:100.90 Bankruptcy and Insolvency .............................. 1-553

1:100.90.10 Transfers at Undervalue andPreferences .............................................. 1-554

1:100.90.20 Consumer-related Amendments ............... 1-5571:100.90.30 Commercial-related Amendments ............ 1-558

1:110 Forms and Precedents................................................ 1-5631:110.10 Business Name Record Search Request ............ 1-5631:110.20 Ontario Business Registration Application ....... 1-5641:110.30 Partnership Registration Example of

Registration for General Partnership ................ 1-5691:110.40 Incorporation under Canada Business

Corporations Act ............................................. 1-5711:110.40.10 Form 1.................................................... 1-5711:110.40.20 Form 3.................................................... 1-5731:110.40.30 Form 6.................................................... 1-574

1:110.50 Organization of Federal Corporation ............... 1-5751:110.50.10 Resolutions of the Directors of (Name

of Corporation) ........................................ 1-5931:110.50.20 Share Subscription .................................. 1-5951:110.50.30 Resolutions of the Shareholders of .......... 1-5961:110.50.40 Director’s Continuing Consent to Act ..... 1-5971:110.50.50 Confirmation .......................................... 1-5981:110.50.60 Consent to Dispense with Audit .............. 1-6001:110.50.70 Notice of Appointment ........................... 1-6011:110.50.80 Notice of Engagement ............................. 1-6021:110.50.90 Direction................................................. 1-603

1:110.60 Incorporation under the BusinessCorporations Act, 1990 .................................... 1-604

1:110.60.10 Certified Copy......................................... 1-6101:110.70 Organization of Ontario Corporation ............... 1-611

Table of Contents

February 2019 C-2 B.L.A.

1:110.70.10 Resolutions of the Directors of (Nameof Corporation) ........................................ 1-634

1:110.70.20 Share Subscription .................................. 1-6361:110.70.30 Resolutions of the Shareholders of (Name

of Corporation) ........................................ 1-6371:110.70.40 Director’s Continuing Consent to Act ..... 1-6391:110.70.50 Confirmation .......................................... 1-6401:110.70.60 Notice of Appointment ........................... 1-6421:110.70.70 Notice of Engagement ............................. 1-6431:110.70.80 Direction................................................. 1-6431:110.70.90 Consent to Dispense with Audit .............. 1-6441:110.70.100 ServiceOntario Centre/Government

Information Offices ................................. 1-6451:110.80 Ontario Forms ................................................. 1-649

1:110.80.10 Forms Under the OBCA .......................... 1-6491:110.80.10.10 Form 1 - Articles of

Incorporation ................................. 1-6491:110.80.10.20 Form 2 - Consent to Act as a First

Director ......................................... 1-6581:110.80.10.30 Form 5 - Restated Articles of

Incorporation ................................. 1-6591:110.80.10.40 Form 6 - Articles of Continuance... 1-6691:110.80.10.50 Form 7 - Application for

Authorization to Continue inAnother Jurisdiction....................... 1-685

1:110.80.10.60 Form 7.1 - Application forAuthorization to Continue underthe Co-operative CorporationsAct................................................. 1-694

1:110.80.10.70 Form 8 - Articles of Arrangement .. 1-6971:110.80.10.80 Form 9 - Articles of

Reorganization............................... 1-7011:110.80.10.90 Form 10 - Articles of Dissolution... 1-7051:110.80.10.100 Form 11 - Articles of Dissolution... 1-7121:110.80.10.110 Form 15 - Articles of Revival......... 1-719

1:110.80.20 Forms under the Business Names Act........ 1-7281:110.80.20.10 Form 1 - Registration - Sole

Proprietorship/Partnership.............. 1-7281:110.80.20.20 Form 2 - Registration -

Corporations.................................. 1-7311:110.80.30 Forms under the Extra-Provincial

Corporations Act ...................................... 1-7331:110.80.30.10 Form 1 - Application for

Extra-Provincial Licence................. 1-7331:110.80.30.20 Form 2 - Appointment of Agent

for Service/Revised Appointmentof Agent for Service ....................... 1-741

Table of Contents

B.L.A. C-3 November 2018

1:110.80.30.30 Form 3 - Application forAmendment to Extra-ProvincialLicence........................................... 1-745

1:110.80.30.40 Form 4 - Application forTermination of Extra-ProvincialLicence........................................... 1-752

1:110.90 Federal Forms.................................................. 1-7561:110.90.10 Canada Business Corporations Act Forms.. 1-756

1:110.90.10.10 Form 1 - Articles of Incorporation. 1-7561:110.90.10.20 Form 2 - Initial Registered Office

Address and First Board ofDirectors ........................................ 1-758

1:110.90.10.30 Form 3 - Change of RegisteredOffice Address................................ 1-760

1:110.90.10.40 Form 4 - Articles of Amendment ... 1-7621:110.90.10.50 Form 6 - Changes Regarding

Directors ........................................ 1-7641:110.90.10.60 Form 7 - Restated Articles of

Incorporation ................................. 1-7661:110.90.10.70 Form 9 - Articles of

Amalgamation................................ 1-7681:110.90.10.80 Form 11 - Articles of Continuance .. 1-7701:110.90.10.90 Form 14 - Articles of

Reorganization............................... 1-7721:110.90.10.100 Form 14.1 - Articles of

Arrangement .................................. 1-7741:110.90.10.110 Form 15 - Articles of Revival......... 1-7761:110.90.10.120 Form 17 - Articles of Dissolution... 1-7781:110.90.10.130 Form 19 - Statement of Intent to

Disclose.......................................... 1-7801:110.90.10.140 Form 20 - Statement of Revocation

of Intent to Dissolve ...................... 1-7821:110.90.10.150 Form 22 - Annual Return .............. 1-784

Chapter 2Purchase and Sale of Going Concerns

2:10 Introduction .............................................................. 2-1

2:20 The Purchase and Sale of Shares ............................... 2-1

2:30 Deemed Year End ..................................................... 2-3

2:40 From the Vendor’s Perspective .................................. 2-32:40.10 Capital Gains and Losses ................................. 2-42:40.20 Capital Gains Rollover for Small Business

Investors .......................................................... 2-52:40.30 Capital Gains Exemption ................................. 2-62:40.40 Reserves ........................................................... 2-7

Table of Contents

November 2018 C-4 B.L.A.

2:40.50 Non-Competition Agreement (NCA)................ 2-72:40.60 Earnout Clauses ............................................... 2-132:40.70 Interpretation Bulletin IT-426R........................ 2-172:40.80 Interpretation Bulletin IT-462........................... 2-232:40.90 Warranties and Covenants ............................... 2-252:40.100 Conversion of Capital Gains into

Inter-Corporate Tax-Free Dividends ................ 2-26.1

2:50 From the Purchaser’s Perspective............................... 2-282:50.10 Cost of the Acquired Shares............................. 2-292:50.20 Deductibility of Interest ................................... 2-292:50.30 Carry Forward of Losses.................................. 2-30

2:50.30.10 Net Capital Losses .................................. 2-302:50.30.20 Non-Capital Losses ................................. 2-30

2:50.40 Changes in Corporate Status ............................ 2-312:50.40.10 Private Corporation ................................ 2-322:50.40.20 Canadian-controlled Private

Corporations (CCPC).............................. 2-322:50.50 Interpretation Bulletin IT-391R........................ 2-332:50.60 Non-Resident Vendors ..................................... 2-372:50.70 Pensions ........................................................... 2-372:50.80 Depreciables and Inventory .............................. 2-38

2:60 The Purchase and Sale of Assets................................ 2-382:60.10 Cash ................................................................ 2-392:60.20 Accounts Receivable ........................................ 2-39

2:60.20.10 Interpretation Bulletin IT-188R............... 2-412:60.30 Inventory ......................................................... 2-44

2:60.30.10 Interpretation Bulletin IT-287R2 ............. 2-452:60.40 Prepaid Expenses ............................................. 2-48

2:60.40.10 Interpretation Bulletin IT-417R2 ............. 2-492:60.50 Capital Assets: Depreciable Property................ 2-542:60.60 Capital Assets: Land and other

Non-Depreciable Assets ................................... 2-552:60.70 Eligible Capital Property .................................. 2-562:60.80 Assumption of Liabilities ................................. 2-572:60.90 Non-Transferable Assets .................................. 2-582:60.100 Deductibility of Interest ................................... 2-592:60.110 Retail Sales Tax ............................................... 2-592:60.120 Land Transfer Tax ........................................... 2-592:60.130 Goods and Services Tax/Harmonized Sales

Tax (“GST”/“HST”) ........................................ 2-602:60.140 Existing Surplus ............................................... 2-632:60.150 Canada Pension Plan ....................................... 2-642:60.160 Allocations on a Bulk Asset Purchase .............. 2-642:60.170 Personal Information Protection and Electronic

Documents Act (PIPEDA) Amendments .......... 2-682:60.170.10 “Business Transaction” Exception to

Consent................................................... 2-69

Table of Contents

B.L.A. C-5 November 2018

2:60.170.20 Exclusion of “Business ContactInformation” Expanded .......................... 2-70

2:60.180 GST/HST Info Sheet (GI-070 July 2010).......... 2-702:60.190 General Anti-Avoidance Rule .......................... 2-86

2:60.190.10 Information Circular 88-2 ....................... 2-872:60.190.20 Supplement 1 .......................................... 2-1002:60.190.30 Interpretation Bulletin 3007..................... 2-106

2:60.200 Non-Tax Factors in the Purchase and Sale of aBusiness ........................................................... 2-110

2:60.200.10 Purchaser’s Perspective............................ 2-1102:60.200.20 Vendor’s Perspective ............................... 2-1122:60.200.30 General Perspective ................................. 2-112

2:70 Forms and Precedents................................................ 2-120.12:70.10 Share Purchase Agreement ............................... 2-120.12:70.20 Asset Purchase Agreement................................ 2-1552:70.30 Purchase of a Going Concern Asset Purchase

Check-List........................................................ 2-203

Chapter 3Use of the Family Trust

3:10 Estate Freeze Considerations ..................................... 3-13:10.10 Family Issues ................................................... 3-13:10.20 Business Issues ................................................. 3-6.13:10.30 Owner’s Objectives ........................................... 3-73:10.40 1999 Federal Budget Changes .......................... 3-14

3:20 Use of the Family Trust in the Family-OwnedBusiness..................................................................... 3-15

3:20.10 Taxation of a Trust .......................................... 3-223:20.20 The Residence of a Trust ................................. 3-22

3:30 Forms and Precedents................................................ 3-253:30.10 Deed of Settlement........................................... 3-253:30.20 Form of Special Resolution to Effect a

Section 86 Reorganization which also Formsthe Basis for the Articles of Amendment .......... 3-44

3:30.30 Establishment of Family Trust ......................... 3-493:30.40 Establishment of Family Trust as New

Common Shareholder of Family OperatingCompany ......................................................... 3-50

3:40 Income Tax Folio ...................................................... 3-513:40.10 S1-F5-C1, Related Persons and Dealing at

Arm’s Length ................................................... 3-51

Table of Contents

November 2018 C-6 B.L.A.

Chapter 4Shareholder Agreements

4:10 Taxation of Shareholders ........................................... 4-1

4:20 Taxation and the Use of Life Insurance ..................... 4-34:20.10 Interpretation Bulletin IT-309R........................ 4-6

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Table of Contents

B.L.A. C-6.1 November 2018

4:30 Valuation Questions .................................................. 4-10

4:40 Complicated Share Capital Structure of theCorporation............................................................... 4-10

4:50 Management Shareholders ......................................... 4-11

4:60 Spousal Rights........................................................... 4-11

4:70 Forms and Precedents................................................ 4-134:70.10 Agreement........................................................ 4-13

Chapter 5Financial Assistance

5:10 Federal ...................................................................... 5-25:10.10 Business Improvements Loans.......................... 5-25:10.20 Program for Export Market Development

(PEMD)........................................................... 5-45:10.20.10 Market Development Strategies (MDS) ... 5-55:10.20.20 Small or New-to-Exporting Companies ... 5-55:10.20.30 Capital Projects Bidding.......................... 5-55:10.20.40 Special Activities ..................................... 5-6

5:10.30 Business Development Bank of Canada [BDC] ... 5-85:10.30.10 Financial Services.................................... 5-85:10.30.20 Venture Capital Division......................... 5-105:10.30.30 Management Services .............................. 5-105:10.30.40 Other Notes ............................................ 5-185:10.30.50 Young Entrepreneurship Financing

Program.................................................. 5-185:10.40 Federal Programs and Services for Business ..... 5-18

5:10.40.10 Canada Business Service Centres ............. 5-185:10.40.20 Canada Small Business Financing (CSBF)

Program.................................................. 5-245:10.40.30 Targeted Wage Subsidy Program............. 5-255:10.40.40 Youth Internship Canada........................ 5-255:10.40.50 Employment Equity ................................ 5-27

5:10.50 Atlantic Canada Opportunities Agency(ACOA) ........................................................... 5-28

5:10.50.10 Business Development ProgramFinancing ................................................ 5-28

5:10.50.20 Business Support for Non-CommercialProjects ................................................... 5-29

5:10.50.30 Selling to the Government....................... 5-305:10.50.40 Funding for Capital Costs....................... 5-305:10.50.50 Funding Your Innovative Ideas............... 5-31

5:10.60 Western Economic Diversification Program...... 5-335:10.60.10 Western Diversification (WD) ................. 5-335:10.60.20 Quality Assurance ................................... 5-335:10.60.30 International Marketing Initiative ........... 5-33

Table of Contents

B.L.A. C-7 August 2017

5:10.60.40 Pathfinding ............................................. 5-335:10.60.50 Government Contracts ............................ 5-345:10.60.60 Advocacy and Coordination.................... 5-34

5:20 Newfoundland and Labrador..................................... 5-365:20.10 Enterprise Newfoundland and Labrador

Corporation (ENLC)........................................ 5-365:20.20 Capital Costs ................................................... 5-365:20.30 Operating Costs ............................................... 5-375:20.40 Marketing Initiatives ........................................ 5-37

5:30 Nova Scotia............................................................... 5-395:30.10 Department of Economic Development and

Tourism Community Business Loan Program... 5-395:30.20 Nova Scotia Business Development

Corporation ..................................................... 5-42

5:40 New Brunswick ......................................................... 5-465:40.10 Financial Assistance to Industry....................... 5-465:40.20 Venture Capital Support Program (VCSP) ....... 5-465:40.30 Trade Assistance .............................................. 5-485:40.40 Community Development Bond Program ......... 5-505:40.50 Self-Start .......................................................... 5-525:40.60 The Industrial Benefits Opportunities ............... 5-53

5:50 Prince Edward Island................................................. 5-555:50.10 Enterprise P.E.I................................................ 5-555:50.20 Equity Investors’ Incentive ............................... 5-555:50.30 Small Business Development ............................ 5-565:50.40 Enterprise Assistance........................................ 5-56

5:60 Quebec ...................................................................... 5-585:60.10 Societe de developpement industriel du Quebec

(SDI)................................................................ 5-585:60.20 Financing Production....................................... 5-585:60.30 Financing Tourism........................................... 5-595:60.40 Financing Combinations and Alliances............. 5-605:60.50 Financing Technological Development and

Design.............................................................. 5-615:60.60 Financing Cooperatives .................................... 5-625:60.70 Financing Quebec Business Investment

Companies (SPEQ)........................................... 5-635:60.80 Financing Exportation ..................................... 5-63

5:70 Ontario...................................................................... 5-665:70.10 The Ontario Development Corporations........... 5-665:70.20 Innovation Ontario Corporation (IOC) ............ 5-705:70.30 Ontario International Corporation (OIC) ......... 5-70

5:80 Manitoba................................................................... 5-745:80.10 Manitoba Industrial Opportunities Program..... 5-74

Table of Contents

August 2017 C-8 B.L.A.

5:80.20 Manitoba Industrial Recruitment Initiative ...... 5-755:80.30 Rural Development Bond Program .................. 5-765:80.40 Rural Economic Development Initiative

(REDI) ............................................................ 5-77

5:90 Saskatchewan ............................................................ 5-805:90.10 Department of Economic Development ............ 5-805:90.20 Community Bonds Program............................. 5-805:90.30 Labour Sponsored Venture Capital Program.... 5-805:90.40 Northern Saskatchewan Economic Development

Revolving Fund ............................................... 5-815:90.50 Saskatchewan Opportunities Corporation

(SOC)............................................................... 5-82

5:100 Alberta ...................................................................... 5-845:100.10 Opportunity Company Loans Division............. 5-845:100.20 Alberta Economic Development and Tourism

Investment Matching Service of Alberta ........... 5-85

5:110 British Columbia ....................................................... 5-865:110.10 Discovery Enterprises Inc ................................. 5-865:110.20 Downtown Revitalization Program .................. 5-865:110.30 Equity Capital Program ................................... 5-875:110.40 Working Opportunity Fund (EVCC)................ 5-88

5:120 Northwest Territories................................................. 5-895:120.10 Small Business Grants ...................................... 5-895:120.20 Business Development Fund (BDF) ................. 5-905:120.30 Economic Development Assistance (EDA) ....... 5-91

5:130 Federal Lobbying Act................................................. 5-925:130.10 Commissioner of Lobbying .............................. 5-925:130.20 Designated Public Office Holders (DPOHs)...... 5-935:130.30 Initial Return ................................................... 5-945:130.40 Monthly Returns.............................................. 5-945:130.50 Offences and Penalties...................................... 5-955:130.60 Solicitor and Client Privilege Concerns............. 5-96

Chapter 6Investment Canada

6:10 Proposed Increase in the Thresholds for ICA Review 6-4

6:20 Notification ............................................................... 6-4.1

6:40 Review....................................................................... 6-4.2

6:40 Mediation Guideline .................................................. 6-6

6:50 Frequently Asked Questions ...................................... 6-7

6:60 The Investment Canada Act........................................ 6-136:60.10 Key Features of the 1985 Act........................... 6-13

Table of Contents

B.L.A. C-9 July 2018

6:70 The Investment Canada Act........................................ 6-246:70.10 Application for Review Under the Investment

Canada Act ....................................................... 6-24

6:80 The Investment Canada Act........................................ 6-266:80.10 Background Information .................................. 6-26

6:90 Investment Canada Act ............................................. 6-35

6:100 The Revised Merger Review Process .......................... 6-75

6:110 Regulations Respecting Investment in Canada ........... 6-99

6:120 Investment Canada Policies ....................................... 6-1086:120.10 Interpretation Notes......................................... 6-108

6:120.10.10 Interpretation Note No. 1 - DefunctBusiness .................................................. 6-108

6:120.10.20 Interpretation Note No. 2 - Part of aBusiness Capable of Being Carried onas a Separate Business ............................. 6-109

6:120.10.30 Interpretation Note No. 3 - All orSubstantially All of the Assets ................. 6-110

6:120.10.40 Interpretation Note No. 4 - Business ....... 6-1116:120.20 Investment Canada Act Guidelines................... 6-113

6:120.20.10 Related-Business Guidelines .................... 6-1136:120.20.20 Guidelines – Administrative Procedures... 6-1156:120.20.30 Guidelines – Acquisitions of Oil and Gas

Interests .................................................. 6-1176:120.20.40 Industry Canada ..................................... 6-1206:120.20.50 Cultural Businesses: Filing Requirements

Guidelines ............................................... 6-1226:120.30 Excerpts from aRegulatory Impact Statement.... 6-127

6:130 Investor Status Under NAFTA and CCFTA ............. 6-128

6:140 Immigrant Investor Program ..................................... 6-131

6:150 Guidelines under the Investment Canada Act ............ 6-133

6:160 Annual Report .......................................................... 6-145

6:170 The Foreign Investment Review Process in Canada ... 6-156

6:180 Investing in the Future of Canadian Books................ 6-172

6:190 Investment Canada Act ............................................. 6-2046:190.10 Applocation for Review ................................... 6-204

6:200 Investment Canada Act ............................................. 6-2126:200.10 Notification to Establish a New Canadian

Business ........................................................... 6-212

6:210 Investment Canada Act ............................................. 6-217

Table of Contents

July 2018 C-10 B.L.A.

6:210.10 Notification to Acquire Control of an ExistingCanadian Business (or Businesses).................... 6-217

6:220 Draft Guidelines on Notifications .............................. 6-221

6:230 Draft Guidelines on Documentation to be Provided byInvestors Seeking a Ministerial Opinion on theCanadian Status of an Individual or an Entity........... 6-223

Volume 2

Chapter 7Business Reorganizations

7:10 Section 85 — Asset Transfer Agreement —Consideration: Common Shares and PromissoryNote .......................................................................... 7-3

7:20 Section 85 — Asset Transfer Agreement —Consideration: Preference Shares and PromissoryNote .......................................................................... 7-11

7:30 Resolution of the Director ......................................... 7-21

7:40 Resolution of the Director ......................................... 7-22

7:50 Section 85 Share Purchase Agreement — Providesfor Common Shares as Consideration........................ 7-23

7:60 Section 85 Share Purchase Agreement — Providesfor Preference Shares as Consideration ...................... 7-31

7:70 Resolution of the Director ......................................... 7-39

7:80 Resolution of the Director ......................................... 7-40

7:90 Share Purchase Agreement — Pursuant toSection 86 Reorganization — Provides for CommonShares as Consideration............................................. 7-41

7:100 Sample Articles of Amendments for Section 86Reorganization .......................................................... 7-49

7:110 Amalgamation Agreement ......................................... 7-54

7:120 Special Resolution of Amalgamation ......................... 7-60

7:130 Amalgamation Agreement ......................................... 7-61

7:140 Special Resolution of Amalgamation ......................... 7-67

7:150 Statutory Declaration of Director and/or OfficerPursuant to Subsection 185(2) of The Canada BusinessCorporations Act ......................................................... 7-67

Table of Contents

B.L.A. C-11 June 2018

7:160 Asset Transfer Agreement on Dissolution (Ontario)... 7-69

Chapter 8Precedents for Corporate Transactions

8:10 Corporate Borrowing................................................. 8-1

8:20 Corporate Precedents................................................. 8-3

8:30 General Assignment of Accounts Receivable.............. 8-4

8:40 Guarantee.................................................................. 8-7

8:50 Promissory Note........................................................ 8-9

8:60 Guarantee and Postponement of Claim...................... 8-12

8:70 Guarantee, Pledge of Shares and Postponementof Claim .................................................................... 8-16

8:80 Agreement of Guarantee, Subordination andPostponement of Claims ............................................ 8-22

8:90 Loan Agreement ........................................................ 8-30

8:100 Non-Competition Agreement ..................................... 8-94

8:110 Demand Promissory Note.......................................... 8-99

8:120 Promissory Note........................................................ 8-101

8:130 Security Agreement.................................................... 8-103

8:140 Security Agreement (PMSI Inventory) ....................... 8-111

8:150 General Security Agreement....................................... 8-116

8:160 General Security Agreement....................................... 8-131

8:170 Share Pledge Agreement ............................................ 8-136

8:180 Closing Agenda ......................................................... 8-143

8:190 Share Purchase Closing Documents ........................... 8-150

Chapter 9Employment Law

9:10 Employment Applications.......................................... 9-19:10.10 Hiring Process.................................................. 9-19:10.20 Guide to Screening and Selection ..................... 9-529:10.30 Offer of Employment ....................................... 9-629:10.40 Employee Expenses .......................................... 9-979:10.50 Wage Earner Protection Program (WEPP) ....... 9-1009:10.60 Employer Remedies for Protection of Confidential

Information...................................................... 9-1039:10.70 Tort Claims by Employees ............................... 9-142.3

Table of Contents

June 2018 C-12 B.L.A.

9:10.75 Fraudulent Concealment in the EmploymentContext ............................................................ 9-175

9:10.75.10 Employment Context .............................. 9-1789:10.80 Compassionate Care Benefits ........................... 9-180.39:10.90 Pension Benefits ............................................... 9-180.69:10.100 Workplace Social Media Policy ........................ 9-1939:10.110 Invasion of Privacy: Tort Liability for

“Intrusion of Seclusion” ................................... 9-1959:10.120 Appendix A – Ontario damage awards............. 9-1999:10.130 Appendix B – Damage awards under

provincial privacy legislation ............................ 9-200.1

9:20 Wrongful Dismissal ................................................... 9-2049:20.10 Introduction..................................................... 9-2049:20.20 A General Overview of the Basic Principles...... 9-221

9:20.20.10 Basic Principle......................................... 9-2219:20.20.20 Just Cause............................................... 9-2269:20.20.30 Condonation of Misbehaviour................. 9-2919:20.20.40 Employment Standards Act (Ontario)....... 9-292.39:20.20.50 Employment Standards Improvement Act

(Ontario) ................................................ 9-3069:20.20.60 Issue Estoppel ......................................... 9-3219:20.20.70 Factors Considered in Determining

Reasonable Notice .................................. 9-3319:20.20.80 Resignation ............................................. 9-3739:20.20.90 Constructive Dismissal ............................ 9-3949:20.20.100 Duty to Mitigate ..................................... 9-4579:20.20.110 Damages ................................................. 9-500.49:20.20.120 Suggested Means of Reducing the Employer’s

Exposure to Liability............................... 9-5729:20.20.125 Vicarious Liability................................... 9-5729:20.20.130 Managing Absenteeism............................ 9-572.99:20.20.140 The Probationary Period ......................... 9-5739:20.20.150 Allegations of Cause ............................... 9-5809:20.20.160 Employment Policies ............................... 9-580.29:20.20.170 Employment Contracts............................ 9-582.59:20.20.180 Termination Interview............................. 9-582.89:20.20.190 Relocation Counselling Agency ............... 9-582.99:20.20.200 New Developments – Ballpark Justice

or the Threshold Onus Doctrine.............. 9-582.109:20.20.210 Conclusion .............................................. 9-583

9:20.30 1995 Sampling of Ontario SeveranceArrangements for London, Kitchener,Hamilton and Toronto ..................................... 9-584

9:20.40 Eleven Ways to Reduce or Eliminate Liability andCosts in Dismissal Situations............................ 9-597

9:20.50 Employee or Self-Employed ............................. 9-603

9:30 Precedents ................................................................. 9-620

Table of Contents

B.L.A. C-13 February 2019

9:30.10 Common Terms in Employment Contracts....... 9-6209:30.20 Employment Agreement ................................... 9-622

9:40 Employment Standards.............................................. 9-6299:40.10 Introduction..................................................... 9-6299:40.20 Ontario Employment Standards Act, 2000 ........... 9-636

9:40.20.10 Hours of Work & Overtime .................... 9-650.19:40.20.20 Minimum Wage ...................................... 9-6659:40.20.30 Vacation ................................................. 9-6699:40.20.40 Public Holidays ....................................... 9-6819:40.20.50 Termination of Employment &

Severance Pay ......................................... 9-6889:40.20.60 Benefit Plans ........................................... 9-6979:40.20.70 Pregnancy and Parental Leave................. 9-7099:40.20.80 Pregnancy Leave ..................................... 9-7109:40.20.90 Parental Leave ........................................ 9-7139:40.20.100 Family Medical Leave ............................. 9-7149:40.20.110 Personal Emergency Leave ...................... 9-7159:40.20.120 Organ Donor Leave ................................ 9-7179:40.20.130 Notice of Termination............................. 9-7179:40.20.140 Severance Pay ......................................... 9-7319:40.20.150 Payments on Termination ....................... 9-7359:40.20.160 Employee Wage Protection Program

(EWPP) Coverage ................................... 9-7359:40.20.160.10 Application .................................... 9-7359:40.20.160.20 Changes to the Employee Wage

Protection Program (EWPP) .......... 9-7369:40.20.170 Domestics and Nannies ........................... 9-7369:40.20.180 Lie Detectors........................................... 9-7379:40.20.190 Retail Business Establishments – Sunday

and Holiday Work .................................. 9-7379:40.20.190.10 Who is Covered ............................. 9-7379:40.20.190.20 Right to Refuse Work.................... 9-7379:40.20.190.30 Right to Continuous Period

of Rest ........................................... 9-7389:40.20.190.40 Protection from Reprisals............... 9-738

9:40.20.200 General Administration........................... 9-7389:40.20.200.10 Records.......................................... 9-7399:40.20.200.20 Business Sale .................................. 9-7399:40.20.200.30 Other Provisions ............................ 9-740

9:50 Labour Relations – Union Organization .................... 9-7419:50.10 Introduction..................................................... 9-7419:50.20 The Legislative Context.................................... 9-7439:50.30 Labour Relations Statute Law Amendment

Act, 2005 ......................................................... 9-7479:50.30.10 Certification Process................................ 9-7479:50.30.20 Unfair Labour Practices .......................... 9-7489:50.30.30 Construction Industry ............................. 9-748

Table of Contents

February 2019 C-14 B.L.A.

9:50.40 Collective Bargaining and Freedom ofAssociation ...................................................... 9-749

9:50.50 Essential Services ............................................. 9-7629:50.60 The Materials................................................... 9-764.19:50.70 Communication Guidelines for Management —

Part I ............................................................... 9-764.29:50.80 Communication Guidelines for Management —

Part II.............................................................. 9-764.49:50.90 Communication Guidelines for Management —

Part III ............................................................ 9-7659:50.100 Union Organizing — How to Respond and

What Your Legal Obligations Are.................... 9-7699:50.100.10 Introduction............................................ 9-7699:50.100.20 Pre-Union Organization .......................... 9-7699:50.100.30 The Union Organizing Campaign............ 9-7709:50.100.40 The Application for Certification ............ 9-7719:50.100.50 Post Certification — The Obligation to

Bargain ................................................... 9-7729:50.100.60 Conclusion .............................................. 9-773

9:50.110 Ontario Labour Relations Board InformationBulletin No. 1 .................................................. 9-774

9:50.110.10 Form A-1................................................ 9-7869:50.110.20 Form A-2................................................ 9-790

9:60 Human Rights in Ontario .......................................... 9-7969:60.10 Introduction..................................................... 9-7969:60.20 The Purpose of the Legislation......................... 9-7989:60.30 Reform of Human Rights System in Ontario.... 9-8009:60.40 Mandatory Retirement ..................................... 9-8339:60.50 Absence Management ...................................... 9-8449:60.60 Accessibility for Ontarians with Disabilities

Act................................................................... 9-8489:60.70 Drug and Alcohol Testing................................ 9-8529:60.80 The Customer Service Standard ....................... 9-858.49:60.90 Family Status................................................... 9-858.79:60.100 A Review of the Material in this Section .......... 9-866.29:60.110 Excerpt from “Guide to Your Rights and

Responsibilities under the Human RightsCode”............................................................... 9-866.2

9:60.120 Investigation of Complaints by the Ontario HumanRights Commission — Employer Beware! ........ 9-911

9:60.120.10 Introduction............................................ 9-9119:60.120.20 Initial Contact by the Commission .......... 9-9119:60.120.30 Receipt of Formal Written Complaint ..... 9-9129:60.120.40 The Commission’s Mandate .................... 9-9139:60.120.50 The Initial Reply ..................................... 9-9139:60.120.60 The Fact Finding Conference .................. 9-9149:60.120.70 The Extended Investigation ..................... 9-917

Table of Contents

B.L.A. C-15 January 2019

9:60.120.80 Conclusion .............................................. 9-9189:60.130 Ontario Human Rights Commission Policy

Statements........................................................ 9-9199:60.130.10 Policy on Employment-Related Medical

Information............................................. 9-9199:60.130.20 Policy Statement on HIV/AIDS-Related

Discrimination ........................................ 9-9249:60.130.30 Policy on Requiring A Driver’s Licence

as a Condition of Employment................ 9-9379:60.130.40 Policy on Height and Weight

Requirements .......................................... 9-9439:60.130.50 Exceptions to the Equality Rights Provisions

of the Ontario Human Rights Code, AsThey Relate to the Workplace ................. 9-949

9:60.130.60 Policy on Preventing Sexual and Gender-based Harassment — Summary............... 9-956

9:60.130.70 Fact Sheet — Sexual Harassment inEmployment............................................ 9-963

9:60.130.80 Policy on Racial Slurs and Harassmentand Racial Jokes ..................................... 9-968

9:60.130.90 The Liability of Employers for the Actionsof Their Employees/Agents ..................... 9-973

9:60.130.100 Policy on Drug and Alcohol Testing ....... 9-9819:60.130.110 Policy and Guidelines on Disability and

the Duty to Accommodate ...................... 9-998.179:60.130.120 Policy on Discrimination Against Older

Persons Because of Age........................... 9-10419:60.130.130 Guide to Releases with Respect to Human

Rights Complaints................................... 9-10779:60.130.140 Guidelines on Developing Human Rights

Policies and Procedures ........................... 9-10979:60.130.150 Special Programs and the Ontario Human

Rights Code: A Self-Help Guide ............. 9-1135

9:70 Occupational Health and Safety................................. 9-11549:70.10 Introduction..................................................... 9-11549:70.20 Duties Under the O.H.S.A. .............................. 9-1154

9:70.20.10 Duties of Employers................................ 9-11559:70.20.20 Duties of Supervisors .............................. 9-11589:70.20.30 Duties of Workers................................... 9-11599:70.20.40 Duties of Corporate Officers and

Directors ................................................. 9-11599:70.20.50 Health and Safety Committees ................ 9-11609:70.20.60 Reporting of Accidents............................ 9-11619:70.20.70 Enforcement of the O.H.S.A. .................. 9-11679:70.20.80 Orders..................................................... 9-11679:70.20.90 Prosecutions ............................................ 9-11689:70.20.100 OHS Duty Under the Criminal Code ...... 9-1168

Table of Contents

January 2019 C-16 B.L.A.

9:70.20.110 Violence and Harassment in theWorkplace............................................... 9-1172

9:70.20.110.10 Domestic Violence.......................... 9-11789:70.20.110.20 Refusal to Work ............................ 9-1178

9:80 Employee Benefit Programs ....................................... 9-11809:80.10 Interpretation Bulletin IT-529........................... 9-11819:80.20 Tax Implications of Employee Benefits and

Payments ......................................................... 9-11949:80.30 Pension Benefits ............................................... 9-11949:80.40 Retiring Allowances ......................................... 9-11989:80.50 Relocation Payments ........................................ 9-1198.1

9:90 Reasonable Notice for Wrongful Dismissal (Table).... 9-1199

Volume 3

Chapter 10Business Practices

10:10 Competition Act ........................................................ 10-1

10:20 Abuse of Dominant Position...................................... 10-12.1

10:30 Notifiable Transactions.............................................. 10-32

10:40 “Bid Rigging”............................................................ 10-38

10:50 “Product of Canada” and “Made in Canada”Claims ....................................................................... 10-46

10:50.10 Enforcement Guidelines ................................... 10-48

10:60 Price Maintenance ..................................................... 10-64

10:70 Deceptive Telemarketing............................................ 10-65

10:80 Deceptive Advertising ................................................ 10-6710:80.10 Telemarketing Section 52.1 of the

Competition Act ................................................. 10-68

10:90 Misleading Advertising .............................................. 10-7710:90.10 Information Bulletin—Misleading Representations

and Deceptive Marketing Practices: Choice ofCriminal or Civil Track under the CompetitionAct ................................................................... 10-86

10:100 Ordinary Price Claims .............................................. 10-9010:100.10 Enforcement Guidelines ................................... 10-92

10:110 Price-Related Representations................................... 10-10310:110.10 False or Misleading Ordinary Selling Price

Representations................................................ 10-10310:110.20 Bait and switch selling...................................... 10-104

Table of Contents

B.L.A. C-17 January 2019

10:110.20.10 Additional information............................ 10-10510:110.20.10.10 Bargain price.................................. 10-10510:110.20.10.20 Nature of the market ..................... 10-10510:110.20.10.30 Nature of advertisement ................. 10-10510:110.20.10.40 Advertiser-supplier relationship and

franchise advertising....................... 10-10510:110.20.10.50 Defences provided in subsection

74.04(3) .......................................... 10-10710:110.30 Sale above advertised price............................... 10-108

10:110.30.10 Additional information............................ 10-10810:110.30.10.10 Market may be restricted ............... 10-10810:110.30.10.20 Exceptions...................................... 10-10810:110.30.10.30 Advertisements............................... 10-10910:110.30.10.40 Sale flyers – Are they catalogues? ... 10-109

10:110.40 Double ticketing............................................... 10-11010:110.40.10 Additional information............................ 10-110

10:110.50 Scanner price accuracy ..................................... 10-110

10:120Marketing Practices — Mandatory Requirements ...... 10-11110:120.10 Telemarketing .................................................. 10-11110:120.20 Notices of Winning a Prize............................... 10-11110:120.30 Multi-level Marketing....................................... 10-11210:120.40 Performance Representations ........................... 10-11210:120.50 Promotional Contests ....................................... 10-11210:120.60 Mandatory Label Information on Prepackaged

Consumer Products (Non-Food) ...................... 10-11210:120.70 Mandatory Label Information on Consumer

Textile Articles ................................................. 10-11210:120.80 Description and Quality Marking of Precious

Metals Articles ................................................. 10-113

10:130 Price Maintenance .................................................... 10-113

10:140 Restrictive Practices.................................................. 10-114

10:150 Deceptive Prize Promotions ...................................... 10-11510:150.10 Defences........................................................... 10-11610:150.20 Enforcement Guidelines ................................... 10-118

10:160 Promotional Contests ............................................... 10-12510:160.10 Enforcement Guidelines ................................... 10-125

10:170 Predatory Pricing Enforcement Guidelines................ 10-133

10:180 Price Maintenance: Setting Your Own Price ............. 10-183

10:190 Corporate Compliance Programs.............................. 10-18710:190.10 Alternative Case Resolution ............................. 10-18810:190.20 Corporate Compliance Programs Bulletin......... 10-189

10:200 Immunity Information Bulletin................................. 10-228

Table of Contents

January 2019 C-18 B.L.A.

10:200.10 Immunity Program under the Competition ActBulletin ............................................................ 10-229

10:210 Conformity Continuum ............................................ 10-24310:210.10 Conformity Continuum Information Bulletin ... 10-243

10:220 Regulated Conduct Defence...................................... 10-26310:220.10 Information Bulletin on the Regulated Conduct

Defence ............................................................ 10-263

10:230 Private Access to the Competition Tribunal.............. 10-267

10:240 Intellectual Property Guidelines ................................ 10-26710:240.10 Information Bulletin on Private Access to the

Competition Tribunal....................................... 10-26810:240.20 Competition Bureau – Intellectual Property

Enforcement Guidelines ................................... 10-271

10:250 Guidelines for Protecting Consumers from Fraudulentand Deceptive Commercial Practices AcrossBorders (OECD)........................................................ 10-313

10:260 Scanner Price Accuracy Voluntary Code................... 10-322

10:270 “Regulated” Conduct Bulletin .................................. 10-327

10:280 Communication of Confidential Information Underthe Competition Act ................................................... 10-336

10:290 Bulletin — Immunity Program under the CompetitionAct ............................................................................ 10-353

10:300 Competitor Collaboration Guidelines ....................... 10-36710:300.10 Enforcement Guidelines — Competitor

Collaboration Guidelines.................................. 10-369

10:310 Consumer Claims Under the Competition Act ........... 10-436

10:320 Consumer Protection Legislation .............................. 10-45610:320.10 Internet Sales Contract Harmonization

Template .......................................................... 10-45610:320.10.10 Disclosure of Information ....................... 10-456.210:320.10.20 Formation of Contract ............................ 10-456.210:320.10.30 Cancellation of Contract ......................... 10-456.310:320.10.40 Credit Card Charge-Backs....................... 10-45710:320.10.50 Internet Sales Contract Harmonization

Template ................................................. 10-45710:320.20 Ontario Consumer Protection Act, 2002 ............ 10-46410:320.30 Quebec Consumer Protection Act ...................... 10-47210:320.40 Unfair Practices ............................................... 10-47410:320.50 Repairs to Motor Vehicles and Other Goods.... 10-476.8

10:330 Exclusion of Liability Clauses................................... 10-479

Table of Contents

B.L.A. C-19 January 2019

10:340 Agreement on Internal Trade (AIT).......................... 10-486.110:340.10 British Columbia-Alberta Mobility Agreement . 10-48710:340.20 Mobility of Accountants .................................. 10-48910:340.30 Mobility of Lawyers......................................... 10-49010:340.40 Inter-Provincial Trade ...................................... 10-491

10:350 Copyright Infringement ............................................ 10-494.110:350.10 Copyright Generally......................................... 10-494.210:350.20 Infringement of Copyright................................ 10-49810:350.30 Copyright Modernization Act .......................... 10-506.2

10:360 Prohibited Lobbying Activity.................................... 10-51210:360.10 Corporation ..................................................... 10-51210:360.20 Legislative History of the Lobbying Act........... 10-51410:360.30 Cases Under the Lobbying Act ........................ 10-51810:360.40 Legislative History of Influence Peddling.......... 10-52010:360.50 Cases Under the Criminal Code, s. 121(1)(d) .... 10-523

Chapter 11E-Business Law

11:10 Introduction .............................................................. 11-1

11:20 Electronic Contracts .................................................. 11-1

11:30 Privacy of Personal Information ................................ 11-15

11:40 Consumer Protection ................................................. 11-19

11:50 Internet Advertising ................................................... 11-26

11:60 Domain Names Disputes ........................................... 11-30.3

11:70 GST/HST and Electronic Commerce ......................... 11-44

11:80 Spyware and Malware ............................................... 11-45

11:90 Confidentiality Agreements........................................ 11-46

11:100 Anti-Spam Legislation .............................................. 11-4811:100.10 Private Right of Action .................................... 11-51

11:110 Compliance and Enforcement Information BulletinCRTC 2014-326......................................................... 11-54

11:120 Regulatory Impact Analysis Statement ..................... 11-61

11:130 Cloud Computing..................................................... 11-84

11:140 Uniform Electronic Commerce Act............................. 11-90

11:150 Canadian Code of Practice for Consumer Protection inElectronic Commerce................................................. 11-99

11:160 Application of the Competition Act to Representationson the Internet........................................................... 11-110

Table of Contents

January 2019 C-20 B.L.A.

11:170 General Registration Rules ....................................... 11-129

11:180 Disputes under the CIRA Domain Name DisputeResolution Policy....................................................... 11-145

11:190 Summary of Procedure for the Resolution of Disputesunder the CIRA Domain Name Dispute ResolutionPolicy ........................................................................ 11-147

11:200 Schedule 1 ................................................................ 11-183

11:210 Schedule 2 ................................................................ 11-184

11:220 CIRA Domain Name Dispute Resolution Policy ...... 11-186

11:230 CIRA Domain Name Dispute Resolution Rules ....... 11-194

11:240 Appendix A.............................................................. 11-212

11:250 Appendix B .............................................................. 11-214

11:260 Canadian Presence Requirements for Registrants...... 11-215

11:270 GST/HST Technical Information Bulletin B-090....... 11-219

11:280 GST/HST Info Sheet GI-013 .................................... 11-258

11:290 GST/HST Info Sheet GI-041 .................................... 11-266

11:300 An Act to promote the efficiency and adaptability of theCanadian economy by regulating certain activities thatdiscourage reliance on electronic means of carrying outcommercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, theCompetition Act, the Personal Information Protection andElectronic Documents Act and the TelecommunicationsAct ............................................................................ 11-272

11:310 Can. Reg. 2012-36 – Electronic Commerce ProtectionRegulations (CRTC).................................................. 11-322

11:320 Can. Reg. 2013-221 – Electronic Commerce ProtectionRegulations................................................................ 11-324

Index .................................................................................. I-1

Table of Contents

B.L.A. C-21 June 2018