Ask Us Anything
Sukhi Hansra October 12, 2026
Most corporate reorganizations start in an accountant's office. There is a plan, perhaps an estate freeze before the next growth phase, a holding company between you and the operating business, or a section 85 rollover moving assets without triggering tax, and usually a steps memorandum describing exactly what has to happen and in what order.
What the memo does not do is execute itself. Every step in it is a legal act. The share classes must exist in the articles, the resolutions must be passed, the share exchanges must be papered, and the elections must match the documents. Our job is turning the accountant’s plan into a corporate record that holds up to the CRA, to a future buyer’s lawyers, and to time.
| Section 85 rollover | Section 86 exchange | Estate freeze | |
|---|---|---|---|
| What it does | Moves property into a corporation without triggering immediate tax | Exchanges one class of shares for another inside the same corporation | Locks today’s value in fixed-value shares so future growth accrues to successors |
| Typical trigger | Incorporating a proprietorship; moving assets or shares under a holdco; structuring a purchase | A reorganization of share classes the steps memo calls for | Succession planning; bringing children or a family trust into future growth |
| The key paper | Rollover agreement + joint CRA election, supported by resolutions and share issuances | Articles and resolutions effecting the exchange | New share classes in the articles, exchange documents, and often a trust alongside |
| Where it fails | Documents that contradict the election’s numbers or order | Classes that never existed in the articles | Share provisions that don’t actually fix the value |
Suppose your operating company is worth $2 million today and you expect it to be worth $5 million in ten years. Without a freeze, that full $5 million sits in your estate, and the tax on the growth lands with you. With a freeze done now, you exchange your common shares for preferred shares fixed at $2 million, keeping control and today’s value, while new common shares, held by your children or a family trust, capture the next $3 million of growth. The future gain, and the tax on it, has moved a generation down; your own exposure is capped at the value you actually built to date. Whether the numbers make the freeze worthwhile, and when to do it, is exactly the modelling your accountant brings. Our job is share provisions that genuinely fix the value, because a freeze with soft provisions is a plan the CRA can reopen. (Illustrative numbers only.)
The failure patterns repeat, and all of them are preventable:
If you do not have an accountant driving the plan yet, we will tell you that clearly, because a reorganization without tax advice is a structure without a reason, and we would rather connect you with the right accountant than paper a plan nobody has modelled.
Reorganization execution is clearly-scoped work once the steps memo exists, so it is typically flat-fee, and you will have the exact number in writing after a free discovery call. That is our no surprise billing policy. Learn how our fees work.
A section 85 rollover lets you transfer eligible property, such as shares, business assets, and sometimes real estate, into a Canadian corporation without triggering immediate tax, by electing a transfer price between you and the corporation. The election is filed with the CRA, and the legal documents must support the numbers it claims.
An estate freeze locks the current value of your shares into fixed-value preferred shares, so growth from that point accrues to new common shares held by your children, a family trust, or another successor. You keep control and today’s value; the future gain, and the tax on it, moves to the next generation.
Because every step in the plan is a legal act. The share classes must exist in your articles, the exchanges need agreements, the decisions need resolutions, and the CRA election needs documents that match it. The accountant decides what should happen; the legal work is what makes it actually happen, provably and in the right order.
A holding company earns its place when it protects retained earnings from operating risk, structures a purchase, or serves a tax plan your accountant has modelled. It also adds a second corporation to maintain, meaning two minute books, two filings, and two year-ends. The honest answer depends on your numbers, and it is a conversation we have with your accountant rather than a default we apply.
Once the steps memo is settled, most reorganizations execute in two to six weeks, driven mostly by how many documents need signatures and whether articles of amendment are required. The planning phase with your accountant is the longer variable, and we can join it at any point.
—
Reviewed by Sukhi Hansra, Business and Franchise Lawyer at Hansra Law.
Free discovery call
Tell us about your situation. We will tell you clearly what it needs and what it does not.
Book your free discovery callNo surprise billing
Written quotes on everything. Flat fees where the scope is clear.
See how our fees work →
See What Others Say
★★★★★
“Being a small business owner is never easy to navigate through the legal issues you may endure, Sukhi called me and gave me great advice, direction and didn't sugar coat anything. Highly Recommend.”
— Jason P., Google review
★★★★★
“Our company has an incredible experience each time we work with Sukhi Hansra. He is both knowledgeable and kind, and is so committed to the wellbeing of his clients, and to a positive outcome.”
— KM Rebirth, Google review
★★★★★
“Sukhi Hansra is a direct representation of what 5 stars entails. He is objective, professional, and quite an impressive individual. Look no further for any business law inquiries”
— Darrel H., Google review
Most owners deal with the legal side only after something goes wrong. By that time, you could spend tens of thousands of dollars unwinding what a quick conversation could have prevented. It doesn’t have to be that way if you have the right lawyer in your corner!