Estate Planning for Ontario Business Owners

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Why owning a corporation changes your estate plan

If you own shares in an Ontario corporation, the company itself does not die with you. Your shares do pass, as part of your estate, and the people who receive them may end up running, selling or winding up the business. That makes a business owner’s plan different from a typical one in three ways: the shares are often the largest asset, they are governed by the corporation’s own documents as well as your will, and the company needs someone with authority to act if you cannot. Our estate planning notes for business owners give the overview; this page goes through the rules.

Start with the tax. Ontario’s Estate Administration Tax guidance lists “business interests” among the property to include in the value of an estate, along with real estate in Ontario, bank accounts and investments. The tax is charged only if an estate certificate is applied for and issued. The same guidance adds an important exception: if a person had multiple wills and the court issues a Certificate of Appointment of Estate Trustee with a Will Limited to the Assets Referred to in the Will, only the assets in that will are counted. That is the basis for the planning described in our article on a secondary will for private company shares.

The corporate side matters just as much. Under section 115(1) of the Business Corporations Act (the OBCA), the directors manage or supervise the management of the business and affairs of a corporation, subject to any unanimous shareholder agreement. Your estate plan and your corporate documents have to point in the same direction. The directors also carry personal duties, set out in directors’ duties under the OBCA.

How your shares pass at death, step by step

Your will names who receives the shares. The estate trustee you appoint holds them until they are transferred to the beneficiaries or sold.
The company recognizes the estate trustee. Section 67(2) of the OBCA says a corporation whose articles or unanimous shareholder agreement restrict the transfer of its securities must, and any other corporation may, treat the executor, estate trustee or legal representative of a deceased shareholder as entitled to exercise the shareholder’s rights, once that person provides the evidence described in section 87 of the Securities Transfer Act, 2006.
The estate trustee becomes the registered holder, if needed. Under section 67(7), the estate trustee can become, or designate, the registered holder by depositing with the corporation the original grant of probate or a certified copy, an affidavit or declaration of transmission, the share certificate, and any assurance the corporation may require. Section 67(8) sets out a different set of documents where the law governing the transmission does not require probate.
Any shareholders’ agreement applies. Under section 108(4), a person who receives shares that are subject to a unanimous shareholder agreement is deemed to be a party to it. Buy-sell terms, restrictions on who may hold shares, and voting arrangements in that agreement will bind your estate and your heirs.
The shares are transferred or sold. The estate trustee carries out the will, subject to the agreement. Selling to a co-owner or an outsider is a transaction of its own, which our page on buying or selling a business covers.

Income tax is a separate track. The Canada Revenue Agency says the deceased’s final return reports income and increases in the fair market value of property, investments and belongings up to the date of death. How that applies to your shares is a question for your accountant, and the earlier they are part of the planning, the better.

What happens to a business owner’s interests on death or incapacity
Situation	What the law provides	Rule
Shares in the main (probated) will	Counted as a business interest in the estate’s value for Estate Administration Tax	ontario.ca, Estate Administration Tax
Shares in a separate will, with a certificate limited to the other will’s assets	Only the assets in the will the certificate covers are counted	ontario.ca, Estate Administration Tax; Rule 74.04(1)(g) (Form 74I)
Estate trustee wants to exercise shareholder rights	A corporation with transfer restrictions must treat them as the holder on proper evidence	OBCA s. 67(2); Securities Transfer Act, 2006, s. 87
Estate trustee wants to be registered as holder	Deposit probate (or certified copy), transmission affidavit, certificate; a different list where probate is not required	OBCA s. 67(7), (8)
Shares held jointly	On proof of death, the corporation may treat the surviving joint holders as owner	OBCA s. 67(6)
Shares subject to a unanimous shareholder agreement	The person who receives them is deemed a party to the agreement	OBCA s. 108(4)
You lose capacity	Your attorney under a continuing power of attorney with authority can exercise your shareholder rights	OBCA s. 67(2)(b); SDA s. 7(2)
Separate powers of attorney for personal and business assets	A new continuing power of attorney revokes earlier ones unless you provide for multiple	SDA s. 12(1)(d)

Who runs things if you lose capacity

A will does nothing while you are alive. If an illness or accident leaves you unable to manage your affairs, someone needs legal authority over your shares. Under section 7(2) of the Substitute Decisions Act, 1992, a continuing power of attorney for property can authorize your attorney (the person you name) to do anything with your property that you could do if capable, except make a will. Section 67(2)(b) of the OBCA requires a corporation with transfer restrictions to treat an attorney under a continuing power of attorney with authority, or a guardian of property, as entitled to exercise the rights of a shareholder who is incapable, on proper evidence.

Many owners want a different person managing the business than managing their house and personal accounts. The SDA allows that, but with a trap: section 12(1)(d) says a continuing power of attorney ends when you sign a new one, unless you provide that there are to be multiple continuing powers of attorney. Each document must say so. Our page on continuing powers of attorney for property covers the signing rules. Your shareholder rights are only part of the picture: who sits as a director, and who can sign for the company, are governed by the corporation’s own articles, by-laws and agreements, so review those at the same time.

What changes the answer

You are the only shareholder

Under section 108(3) of the OBCA, a written declaration by the registered holder of all the issued shares that restricts the directors’ powers is deemed to be a unanimous shareholder agreement. Under section 108(4), whoever later receives shares subject to such an agreement is deemed a party to it, so its terms carry over.

You have co-owners

A shareholders’ agreement may already decide what happens to your shares on death or incapacity, such as a buyout by the other owners. A will and an agreement that point in different directions leave your estate trustee with a conflict, so the two need to be drafted together. Our shareholders’ agreements page explains what these agreements usually address.

You are married

A surviving married spouse can choose between what your will gives them and an equalization entitlement under section 5(2) of the Family Law Act, and “property” for that purpose means any interest in real or personal property, which includes shares. The election has to be filed within six months of the death (section 6(10)). A marriage contract under section 52 can set the spouses’ rights on death.

The beneficiaries are young

Money left to a child outright is generally paid into court until the child reaches the required age, usually 18, according to Ontario’s guidance on a child’s money. Ontario’s estate planning guidance notes that a trust in a will can hold property for people under 18, which is how a business interest is often held for young beneficiaries.

Probate is applied for on the shares

If your estate trustee does need a certificate for the will that holds the shares, the tax is charged on the assets that certificate covers. The calculation is explained in how much is Ontario’s Estate Administration Tax. The application is covered in how to apply for a Certificate of Appointment of Estate Trustee.

Example

For example, imagine Nadia, of Richmond Hill, who owns all the shares of an operating company. Her other assets are a house in her own name worth $900,000 with no mortgage and $150,000 in bank accounts. She signs two wills: a primary will for the house and accounts, and a secondary will for her shares. She also signs two continuing powers of attorney, each stating that she intends multiple powers of attorney: one for her personal assets naming her husband, and one for her shares naming her sister, who knows the business.

When Nadia dies, her estate trustee applies for a certificate limited to the assets in the primary will. The value counted is $1,050,000, so the tax is 1,000 times $15, or $15,000. Whether the shares need a certificate at all depends on what the company requires before recognizing the estate trustee under the secondary will; if no certificate is applied for, no Estate Administration Tax arises on them, since the tax is charged only when a certificate is issued. Had Nadia signed the second power of attorney without saying she wanted multiple documents, section 12(1)(d) would have ended the first one.

Common mistakes business owners make

A will that ignores the shareholders’ agreement. The agreement binds whoever receives the shares.
One power of attorney cancelling another. Without wording that provides for multiple documents, a new one ends the old one.
No one with authority while you are in hospital. Without a continuing power of attorney, family may have to apply to become your guardian of property.
Assuming a secondary will avoids every cost. It works only if the assets in it can be dealt with without a certificate; plan it with the company’s documents in hand.
Leaving the accountant out. The final return reports gains in value up to death, and the plan should reflect that.
Outdated corporate records. The share register and minute book should match what your will assumes you own.

What to do this week

Gather the articles, by-laws, share register and any shareholders’ agreement.
Confirm exactly which shares you hold, and whether any are held jointly or through another company.
Read what your shareholders’ agreement says about death and incapacity.
Decide who should manage the business if you cannot, and whether that person differs from your personal attorney.
Book time with your accountant to talk through the tax on death.
List your other assets and how they are held, so the wills can be split sensibly.
If you would like the wills and powers of attorney drafted alongside your corporate documents, a first consultation takes 30 minutes, by video or in person. You can request one here.
If relatives will hold shares, read bringing family members into your company.

Frequently asked questions

Do my company shares need probate?

It depends on what the company requires. Section 67(7) of the OBCA lists a grant of probate, or a certified copy, among the documents an estate trustee deposits to become the registered holder, and section 67(8) gives another route where the governing law does not require probate. That is why the company’s documents are reviewed when a secondary will is planned.

Is Estate Administration Tax charged on the value of my company?

On the value of your shares, if they are in a will for which a certificate is issued. Ontario’s guidance lists business interests as property to include in the estate’s value.

Can my attorney vote my shares if I lose capacity?

Yes, if your continuing power of attorney gives them authority. The OBCA requires a corporation with transfer restrictions to treat an attorney with authority as entitled to exercise the shareholder’s rights, on proper evidence.

Does my shareholders’ agreement survive my death?

For a unanimous shareholder agreement, section 108(4) of the OBCA says a person who receives shares subject to it is deemed a party. Its terms then apply to your estate and heirs.

Can I have different attorneys for my business and my personal affairs?

Yes, but each continuing power of attorney must provide for multiple documents, or the later one ends the earlier one under section 12(1)(d) of the Substitute Decisions Act.

Who should I talk to first, a lawyer or an accountant?

Both, ideally together. The legal documents decide who receives and controls the shares; the accountant looks at the tax. We practise both estate planning and corporate law, and you can read about our lawyers.

Sources

This page is general information about Ontario law, not legal advice for your situation. It reflects the law as of October 26, 2026.

Estate planning for owners of an Ontario corporation