In follow up to your summary the Ontario Medical Association assists physicians through the process of setting up a PC. They charge a mere $1,000 for this less than helpful support. I was referred a doc who had attempted to set up a PC through the OMA service and the way it works is the doc answers some questions and the OMA program spits out articles of incorp and all other documents. For instance they ask for the names of the doc’s family and based on the answer the program sets up the classes of shares. The shares were common shares with voting rights and a number of different classes of special shares. The number of seperate class of shares were based on the answers to the question “please provide the names of your family members”.

In light of the Demers case the problem I can see is with the special shares in that the shares are issued for nominal consideration, do not participate in growth and have a discretionary dividend right. Also, there was not menitioned anywhere in the documents from the OMA that the shareholders needed to pay for the shares they were issued. Something that could prove problematic in light of Demers.

As an aside the doc in question answered the question of the names of family members with son, Mum, Dad and brother. The correct answer to the ambiguous question. The problem was that the OMA program added incorrectly the brother as a shareholder.

In the end the doc went to a lawyer and got the articles corrected and came to us for the tax advice and CPSO filings.

The OMA assisted set up process is like the will kits and should be avoided.