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Tag: Canada Business Corporations Act

Challenges in Starting a MIC: Paying Dividends

One of the biggest challenges in running a MIC is when you first realize that the investors who were once your private lenders are now expecting the equivalent of their monthly interest cheques however in the form of a dividend.  With a mortgage, a private lender is accustomed to receiving a monthly cheque of interest only (usually).  The formula is simple, the private lender is expecting the equivalent of the monthly interest rate applied to the principal outstanding on the loan they funded.  With a MIC however, there is no direct attribution of the investor’s investment, through the purchase of MIC shares, with any of the investments the MIC makes, such as mortgage loans.  Hence your once private lender, now turned investor/subscriber in the MIC, has no way of knowing what they will earn except for the expectations you leave them with.The challenge as a newly started MIC should mean no such expectations at all.  Securities law and regulations require that you provide information only based on actual facts and not on a forward looking basis.

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THE SHAREHOLDERS AGREEMENT: The most important agreement of your Company!

First and foremost a contract, a shareholders agreement has all the ingredients thereof, for it to be binding and legal.  There is an offer and acceptance, consideration, capacity, and above all a bona fide legal purpose. They (shareholders agreements) are a class of contracts relating specifically to the relationship between some or all of the shareholders of a corporation and, possibly, between those parties and the

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PROVINCIAL INCORPORATION: Deeper into Federal vs. Provincial

The provincial law in Ontario stipulates that a company doing business in the province should also incorporate there. Meticulously satisfying the incorporating requirements therein, along with advice from lawyers and accountants, the process of forming a company would not be difficult.

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WHAT YOU SHOULD KNOW ABOUT CANADIAN CORPORATE LAW

Among the definitions of business, the Concise Oxford Dictionary lists it as a person’s  regular occupation or trade and then further elaborates it as commercial activity. The point to be noted here is that the word corporate has not been used, though it generally means a large company or group usually engaged in commercial activity. That is not, however, necessarily true: There are corporate bodies engaged in

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