Securing Your Business’s Future: Why Every Entrepreneur Should Have a Corporate Will


Toronto business lawyer, Antonio DiMinno, of DiMinno Rizzi Lawyers, provides a basic overview of corporate wills in Ontario. All entrepreneurs should consider creating a corporate will if they own a company. This article will take a look at corporate wills and why they are one of the best things you can do for your business’ future.

What is a Corporate Will?

A corporate will, also known as a “secondary will”, is a powerful estate planning tool if you own any private companies. By private, we mean any company that is not listed on a stock exchange.

A corporate will instructs the executors of your estate on who receives the shares of your company if you die.

There are two main reasons to have a corporate will:

(1)  To avoid probate taxes; and

(2)  To control who will obtain control and ownership of the company after you are gone.

What is Probate Tax and How does a Corporate Will avoid it?

When you pass away in Ontario, for your beneficiaries to receive your property, your executor needs to go through the ‘probate’ process. This involves validating your will in court and distributing your assets. However, probate comes with estate administration tax (aka ‘probate tax’) that must be paid on certain assets. Some assets require probate, while some do not. Companies do not require probate, but you will still be forced to pay it if you don’t have a corporate will.

Seems unfair, doesn’t it?

But, there is a solution: create two wills.

Your “primary” will goes through probate, and your “secondary” will deals with your company and escapes probate.

Still having trouble? No worries – the law isn’t often very intuitive.

Let’s imagine you have two baskets of fruits: one basket contains ripe and delicious fruits, which are quite valuable, while the other basket holds spoiled fruits with little value. Now, the tax authorities arrive and inform you that they will impose a 2% tax but can only tax one of the baskets. In this situation, you cleverly decide to present them with the “bad basket,” which results in a smaller tax payment, while you get to keep the entire contents of the valuable “good” basket for yourself.

Corporate Wills for Business Succession

While saving tens of thousands of dollars is the main benefit of having a corporate will, the other key benefit is being able to control who gets your company after you die.


Mary, a widow, is the owner of various assets, including a house, cottage, and stocks worth a total of 3 million dollars. She also owns a logistics business valued at around 3 million dollars by a business valuator. Mary wants to ensure the future of her business remains within the family. She has two children, Sarah and John, with John being an integral part of her business for the past decade.

Sarah has no interest in the business, but Mary believes John is the right person to continue running and expanding it to support his own family. To ensure her wishes are fulfilled, Mary decides to divide her assets: in her “primary will,” she leaves her 3 million dollars in personal assets to her daughter, Sarah, while in her “corporate will”, she designates John as the recipient of all the shares of her business.

When Mary dies, her daughter gets her personal assets and her son gets control of the business and avoids paying $44,000.00 in probate taxes.  

How an Ontario Business Lawyer Can Help

When considering a corporate will for your business, a great first step is to speak to an Ontario corporate wills lawyer or Ontario business lawyer. Courts routinely set aside corporate wills because of technical errors, so it’s important you hire an experienced Ontario corporate wills lawyer for your business succession plans.

An Ontario corporate wills lawyer will work closely with you to clear the fog and ensure that you protect your company’s future.


Antonio DiMinno



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Disclaimer: All number figures are approximate only and may be subject to change. Like all material on this website, this is not financial, legal, or tax advice. Contact a professional for your specific situation. 

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