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Legal Ease
Legal Ease, Lawyer
Category: Canada Law
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Experience:  Lawyer
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I am a member of a Golf Course which was incorporated under

Customer Question

I am a member of a Golf Course which was incorporated under the laws of Ontario as a Corporation with share capital back in 1922. In 1945 the Directors decided to recall all outstanding shares and became a Corporation without share capital and still is today.
Question?
Are the rights of members of a Corporation without share capital the same as the rights of shareholders of Corporations with share capital?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Legal Ease replied 1 year ago.
But how can there be members with share capital if they recalled the shares?
Customer: replied 1 year ago.
After our Club recalled the shares we became a Corporation WITHOUT SHARE CAPITAL under the laws of Ontario, that is the whole question. Do members of a Corporation WITHOUT SHARE CAPITAL have the same rights as shareholders of a Corporation WITH SHARE CAPITAL? We will be also a NON PROFIT CORPORATION when the non-profit Corporation Act of Ontario is put into law.
Expert:  Legal Ease replied 1 year ago.
The main difference is that you would not be able to share in any financial gain such as through dividends.
So the rights are different in that respect.
But there are advantages to having this corporation rather than being unincorporated as the club will still be a separate legal entity and so no one would run the risk of being personally liable and as a legal entity it can own property.
Does that clarify things?
Customer: replied 1 year ago.
I asked a question two days ago and the reply was another question which did not make sense. The person that asked the question, did not seem to know the difference between an Ontario Corporation incorporated under the laws of Ontario "with share capital"
and one incorporated "without share capital". My question was very simple as follows: Are the rights of members/owners of corporations (i.e. incorporated member golf courses) "without share capital" the same as the rights of shareholders of corporations "with
share capital" under the laws of Ontario???? A quick reply will be appreciated.
Expert:  Legal Ease replied 1 year ago.
I did answer.Your first question was ambiguous. I thought you were confused as many customers were and that you believed some of the members who hold shares and other would not. That of course made no sense to me.Then I did answer and I said:The main difference is that you would not be able to share in any financial gain such as through dividends. So the rights are different in that respect. But there are advantages to having this corporation rather than being unincorporated as the club will still be a separate legal entity and so no one would run the risk of being personally liable and as a legal entity it can own property. Does that clarify things?

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