Top 5 Legal Mistakes Corporations Make (and How to Avoid Them)

Whether you’re running a small business, charity, or incorporated non-profit, staying legally compliant is more than just a box-ticking exercise. 
Many organizations get caught off guard by small mistakes — missed filings, outdated contracts, or unclear employment practices — that can lead to big problems later. 

Here are the five most common legal mistakes corporations make in Ontario, and how a licensed paralegal can help you avoid them. 

1. Neglecting Corporate Record-Keeping

Too many corporations forget to maintain updated minute books, resolutions, and bylaws. 
When the CRA or a grantor asks for proof of proper governance — or when directors change — missing records can cause major delays or penalties. 

Avoid it: Keep your corporate minute book current with annual resolutions, board minutes, and updated director/officer registers. A paralegal can prepare and file these documents accurately. 

2. Missing Annual Filings or Compliance Deadlines

Corporations under Ontario or federal law must file annual returns and sometimes charitable returns. Missing these can lead to administrative dissolution or fines. 

 Avoid it: Use a compliance calendar or let a paralegal handle your annual filings, renewals, and updates to stay in good standing with the Ontario Business Registry or Corporations Canada. 

3. Using Outdated or Verbal Contracts

Handshake agreements and copied templates can lead to disputes later. Many corporations lose money because contracts don’t clearly define payment terms, responsibilities, or liability. 

Avoid it: Have a paralegal draft or review your service, employment, or vendor contracts. Clear written terms protect everyone involved. 

4. Mishandling Employee or Contractor Relationships

Misclassifying workers or ignoring Employment Standards Act (ESA) rules can trigger Ministry of Labour investigations. 
Even good intentions can turn into fines or legal disputes if staff policies aren’t documented. 

Avoid it: Maintain ESA-compliant policies, written agreements, and termination procedures. Paralegals can guide you on documentation and workplace compliance. 

5. Ignoring Disputes Until They Escalate

Small conflicts with clients, tenants, or contractors often turn into expensive court cases when ignored. 
The earlier you act, the more likely you can resolve it efficiently. 

 Avoid it: Consult a paralegal early. They can represent you in Small Claims Court (up to $35,000) or at tribunals like the Human Rights Tribunal of Ontario (HRTO) or Landlord and Tenant Board (LTB) — without the high cost of a lawyer. 

💡 Final Takeaway 

Legal compliance doesn’t have to be complicated or costly. 
By staying organized and working with a licensed paralegal, your corporation can: 

• Stay compliant with Ontario regulations 

• Protect itself from costly disputes 

• Build stronger relationships with staff, partners, and clients 

Don’t wait for a legal issue to find you — take control now and protect your organization’s future.