Private Corporation Governance

Private corporations sometimes do not strictly observe corporate law requirements regarding annual shareholders' proceedings and corporate governance. Non-compliance can be uneventful. However, changing shareholder relationships can highlight potential problems, as was illustrated by a recent case involving a family investment corporation.

Melflor Investments Ltd. v. Naim Investments Ltd., 2013 ONSC 6538, is an oppression remedy case. Naim was founded by three first cousins: Gerald, Stanley, and Melvyn. Chaim, the family's long-time accountant and trusted adviser, was given 10 percent of the shares. It seems that the remaining 90 percent was owned in equal proportions by the three branches of the family represented by the three first cousins.