There are several types of legal arrangements for operating a business. The three main ownership types are:
- own all the assets, are entitled to all the profits and are responsible for all the debts
- register with the Ministry of Government and Consumer Services (MGCS) only if a trade name is used
- involves two or more individuals or corporations coming together to form a partnership
- Each partner may be involved in running the business, share in the profit or loss and may be held totally liable for the debts of the partnership
- must register with MGCS – any trade name will be included in the registration
- are defined as a legal entity created by law with officers and directors acting on its behalf
- officers are appointed by directors and hold positions such as the President, Vice-President, Treasurer or Secretary – they are responsible for the day-to-day operations of the company
- must be registered with provincial or federal agencies and if a trade name is used it must be registered with MGCS
A change made to the ownership of your business is considered a material change and you must notify us within 10 business days.
The following are examples of common ownership changes:
- selling or buying your business, obtaining a purchase certificate
- change in business name
- change in business type
- change of partners in a partnership or executive officers in a corporation
- change in legal affiliations with other companies (e.g., amalgamations or mergers)
- dissolution (bankruptcy or receivership, death of a sole proprietor)
Buying or selling your business
Selling your business includes the sale of shares or assets. If you are selling shares, a new legal entity is not created so a purchase certificate is not required. You will still need to notify us if there is a change in the name of the business or any changes to your address(es).
If you are selling or purchasing the assets of a business, you should get a purchase certificate. We need to be informed if the seller will not continue to operate after the sale to determine their reporting and payment obligations with us.
A valid WSIB purchase certificate (PDF) verifies that the company selling, leasing or transferring all or part of a business (including major assets) has WSIB coverage and that there are no outstanding debts on the account. We may hold the purchaser liable for all amounts owed by the vendor up to the date of sale, if you do not get a valid purchase certificate.
You need to make the request for the purchase certificate from us before the date of sale. You will need to provide us with the following information:
- requestor’s information (including vendor’s authorization if required)
- vendor information
- purchaser information
- date of sale transaction
- type of sales transaction (share or asset)
- list of assets
- value of assets (if partial sale)
- copy of the purchase agreement
- will the vendor continue to operate?
The purchase certificate worksheet (PDF) and the purchase certificate policy can help you with the process. A purchase certificate is valid for 30 days from the date of issue printed on the certificate. If the transaction does not take place during the validity period of the certificate, you may request another certificate.
Change in business type
Business type changes can include a sole proprietor incorporating or forming a partnership, or a partnership incorporating. Please notify us in writing or by phone and we can tell you how these changes may affect your account.
Change of partners in a partnership or executive officers in a corporation
An addition or removal of partners in a partnership affects your account. If this happens, we need to be informed in writing of the partnership name change, along with a copy of the partnership agreement.
A change in the executive officers in a corporation is recorded in the corporate minute book. We need a copy of the minutes showing the appointment and resignation of the officer(s).
Change in legal affiliations with other companies (e.g., amalgamations or mergers)
Amalgamations do not apply to sole proprietorships or partnerships. Two or more corporations may legally merge or amalgamate and continue as one corporation. This merger or amalgamation is registered with the MGCS and articles of amalgamation are issued. The new amalgamated corporation acquires all assets and assumes all liabilities of the merged or amalgamated corporations. The articles of amalgamation must be provided to us to update the affected accounts.
Dissolution (bankruptcy or receivership, death of a sole proprietor)
Dissolution is the process of dissolving the company so that it no longer exists. The assets are liquidated to pay creditors and most cases, the liabilities are satisfied.
We need to be notified of company dissolutions such as:
- bankruptcy: when the debts of the company exceeds their assets, a company files for bankruptcy or is placed in bankruptcy. A trustee is appointed by the court to administer or hold in trust all property/assets of the business.
- receivership: when a company defaults on a payment(s) and the secured creditors ‘calls in its loan(s)’. A receiver is appointed by the court to administer or hold in trust all property/assets of the business.
- death: when a trustee is appointed to liquidate assets and pay creditors if a sole proprietor, partner or sole executive officer in a corporation dies.