Business Law in Canada

This document discusses various aspects of business law in Canada, including the principles of agency law, transferability of shares, federal regulations, costs of forming corporations, memorandum, articles of incorporation, termination of a corporation, employer-employee relationship, termination of employment contract, human rights legislation, worker's compensation legislation, collective agreement, legal conditions for strike or lockout, intellectual property, copyrights, patents, trade secrets, trademarks, Anton Piller order, passing off, and the enforcement of copyright and trademark laws.

Running head: BUSINESS LAW IN CANADA 1
Business Law in Canada
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The principles of agency law are relevant to corporations in that they provide guidelines for
entities to follow in case of any eventualities. The principles of agency law outline fiduciary
instructions that govern the relationship between corporations, agents, and third-party players.
Corporations employ these principles to determine the type of authority relayed to the third
party.
Free transferability of shares allows shareholders to benefit from liquidity and deal with
situations such as a shareholder’s demise. The right is often modified by shareholder agreement
since the shareholders hold the rights to shares hence get to decide how they should be
transferred.
i. Increased federal regulations – corporates are subjected to more oversights such as
complicated tax filing
ii. Double taxation – dividends and profits paid to stakeholders are taxed as taxed doubly as
income
iii. High costs in forming corporations – Attorneys and legal agencies typically charge more
to allow the formation of corporations
iv. Higher state fees – corporations are charged annual franchise fees by the state
The memorandum is the basic important legal document that controls and provides guidelines on
a corporation’s external operations. Articles of incorporation represent the legal formation of a
corporation detailing company name, address, stock to be issued, an agent for service. The
articles of association regulate the corporation's internal affairs detailing initial capital and
conditions necessary for operation.

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A corporation’s capacity is determined by its memorandum of association which outlines exactly
the main objectives and expertise provided by a corporation. An exception to the corporation
capacity rule is realized when a contractual agreement has already been made between parties
hence nothing can halt the contract or transaction from being fulfilled.
Yes. Preferred and common shareholders have a right to dividends and are entitled to claiming a
portion of the company's profits. Once dividends are announced, common shareholders have a
right to receive their share depending on the percentage payout as decided by the board of
directors. However, preferred shareholders get their dividends before the common shareholders.
It is becoming increasingly difficult to get prominent individuals to serve as directors of
Canadian corporations because they are highly in demand yet the supply of such people is
limited. A majority of prominent individuals are already members of more than a single board of
directors underscoring the demand for highly qualified persons.
In order to terminate a corporation in Canada, it is necessary to inform the Canada Revenue
Agency, fulfill any outstanding tax amounts. Termination of a corporation also requires filing a
final tax return and as well as financing the succession strategy. Payroll accounts also have to be
closed with the Canada Revenue Authority.
Employer to employee
I. Remunerate employee agreed amount for work done.
II. Adhere to safety and health guidelines.
III. Assign employees with duties.
IV. Afford employee Mutual Trust and Confidence.
V. Allow a reasonable chance for any complaints to be addressed.

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VI. Provide accurate information about rights as per their contract.
Employee to employer
a) Adhere to instructions and orders as long as they are legal.
b) Take care of the employer's property.
c) Perform assigned duties with skill and care.
d) Turn down bribes or favors.
e) Protect the employer’s confidential information.
f) Disclose any mistakes or wrongdoing.
g) Strive to be honest.
Termination of an employment contract that is for an indefinite period of time requires a notice
to be issued in appropriate time before the due date. Notice is relayed by the party that seeks the
termination which could be either the employer or the employee. The appropriate notice period
to terminate an employment relationship is dependent on the employee’s continuous length of
service.
Overlooking an employee’s incompetence over a period of time holds certain risks for the
employer. The risks involved with such a scenario include increased absenteeism, decreased
productivity, compensation claims, and poor performance. Also, there costs associated with
recruiting new employees and mitigating prolonged misconduct.
Human rights legislation apply to employment to ensure workers afforded basic rights like not
facing discrimination because of race or sexual orientation at the workplace. Duty to
accommodate is the provision of different or special treatment of certain individuals to prevent

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and discourage instances of discrimination. Employers cite undue hardship as an effect of duty to
accommodate to limit and have policies stay in place.
Worker's compensation legislation relates to the coverage of employees and protection against
work-related health conditions and accidents. The objective is realized by providing cash
benefits to restore lost earnings and maintain the previous standard of living by paying all
medical expenses for job-related injuries including rehabilitation. A worker should seek
compensation from the employer through the worker's compensation process.
A collective agreement is limited to and influenced by the individual rights of employees. Once
in place, the collective agreement will work towards accommodating the individual rights of
every employee. The employer is responsible for ensuring that the elements reached in the
collective agreement are adhered to and individual employees are afforded the benefits stipulated
under the agreement.
Several preconditions are necessary for a strike or lockout to be legal.
i. Conciliation process – involved parties have to meet with a conciliator selected by the
Ministry of Labor.
ii. Strike vote – members of the union have to hold a secret vote with more than 50% of the
members voting in support of the strike.
iii. Bargaining – union representatives and the employer should engage in collective
bargaining negotiations to review the newly proposed terms and conditions.

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An individual wishing to cross a picket line is protected by law in the event that they face
disciplinary action for no longer supporting the industrial action taking place. If condemned by
the union for crossing a picket line, employees can seek legal action by filing a complaint to an
Industrial Tribunal.
Intellectual property endeavors to balance the principle between fostering and encouraging
innovation and the act of sharing knowledge that is birthed from creativity.
Intellectual property also balances the principle of stimulating creativity and to empower the
body of knowledge through enrichment.
Copyrights provide protection for original content giving the owner the holder the exclusive
rights to perform, display, share, and modify the work.
Patents give property rights on an invention discouraging others from making or selling similar
models.
Trade secrets are vital information protected from competitors in order to give an advantage to
the original inventor. Trademarks are symbols, words, designs, or phrases that set an
organization apart from other competitors.
An Anton Piller order is granted in instances where the authority to search a location and
confiscate items without advance warning is required. The remedy is crucial when preventing the
destruction of evidence relevant to a case involving patent and copyright infringement.
Passing off constitutes the enforceable laws in instances of unregistered trademarks. The law of
passing off discourages parties from falsely representing goods and services as similar to another
brand. The law also prevents parties from holding out services and goods as having a relation to

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another brand when it is not factual. Victims can sue and prevent an imposter from continuing
with the misrepresentation.
The restrictive nature of the internet that allows people to freely share content online makes it
difficult to enforce copyright and trademark laws. The ease of modifying online information by
online audience further represents a pitfall in enforcing copyright and trademark laws.

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References
Alexander, T., Papadeas, P., Filsinger, K., Olivo, L. M., Rock, N., & Wheeler, C.
(2018). Canadian business law.
Berryman, J. B. (2013). The law of equitable remedies.
Crerar, D. A. (2017). Mareva and Anton Piller preservation orders in Canada: A practical
guide.
Finch, E., & Fafinski, S. (2013). Legal skills.
Geiger, C. (2014). Challenges for the enforcement of copyright in the online world: Time for a
new approach. Retrieved from
https://www.researchgate.net/publication/260791463_Challenges_for_the_enforcement_
of_copyright_in_the_online_world_Time_for_a_new_approach
Harms, L. T. C., & Organisation Mondiale de la propriété intellectually. (2012). The
enforcement of intellectual property rights: A case book.
In Geiger, C. (2015). Research handbook on human rights and intellectual property.
Cheltenham, UK: Edward Elgar Publishing.
The National Academies Press. (2000). The Digital Dilemma: Intellectual Property in the Digital
Age. The National Academies Press. Retrieved from
https://www.nap.edu/read/9601/chapter/7

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