A&J Studio — Corporate Governance

1. Company Overview

Operating nameA&J Studio
Legal name BC Name Request NR 2989801, choices in order: (1) A&J STUDIO LTD. (2) A&J TECH STUDIO LTD. (3) A&J STUDIO TECHNOLOGY LTD. Approval is still pending. Track the request at the BC Name Request site and see the BC naming guidance. Ltd., Inc., and Corp. are interchangeable designations.
Entity typeLimited Company under the BC Business Corporations Act
Co-foundersYansong Zang (Albert Z.) · Yiji Wang (Jacob W.)
DirectorAlbert Z. (sole director)
Head officeVancouver, British Columbia
Main businessCustom software and technology solutions for small and micro businesses — including application development, IT consulting, and technical support.
Incorporation numberPending incorporation
Business number (CRA)Pending
Fiscal year endDecember 31

Roles and responsibilities

Attention — signing authority

Signing authority is still to be decided. Please, as part of this consultation, review and settle the company's signing authority.

Albert Z. is the sole director. Jacob W. is not a director. The officer titles are management roles. They do not add a board vote, and they do not replace either class consent.

Person	Title	Responsibility
Albert Z.	Director	Sole director. Decides ordinary matters by written resolution. Major matters need both class consents (see §4).
Albert Z.	CEO	Strategy and vision; external relationships; accountability for ordinary management.
Albert Z.	Secretary	Minute book and registers; notices, resolutions, and minutes; filings.
Jacob W.	CTO	Technical leadership; architecture; engineering standards; security.
Jacob W.	President	Day-to-day operations, delivery, and internal management.

2. Share Structure

Attention — class terms

This draft is not ready to file. Please, as part of this consultation, review and confirm the company's class terms before filing.

The company uses two share classes, with a maximum of one share in each. Albert Z. holds the Class A share. Jacob W. holds the Class J share. There is no unissued share. The class rights and the major-matter rule are written into the Articles (see §8).

Class	Rights	Holder
Class A	Carries the right to vote at general meetings. Dividends on this class. Veto on major matters.	Albert Z., the one authorized share
Class J	Does not carry the right to vote at general meetings. Dividends on this class. Veto on major matters.	Jacob W., the one authorized share

Every share in a class carries the same rights (BCA s. 59(4)), so each founder has his own class. The design does not admit another shareholder, and neither class is diluted. Changing that structure is a major matter (§4).

3. Ordinary Decisions

Albert Z. decides ordinary matters alone, in writing. The company does not hold a board meeting or a shareholder meeting. The two records below are different papers, and the minute book names which one it is (see §10). A major matter is not decided here (see §4).

3.1 Director resolutions

The directors manage the company, or supervise that management (BCA s. 136). This company does not hold board meetings. Albert Z., the sole director, decides ordinary matters by a written directors' resolution (s. 140(3)): client work, delivery, and spending in the ordinary course. There is no second director, so those decisions do not deadlock.

Jacob W. does not sign a directors' resolution. President and CTO work is officer work under the director's authority (§1).

3.2 Shareholder resolutions

The company does not hold shareholder meetings, including the annual general meeting. Only Class A carries the right to vote at general meetings, and Albert Z. holds that share. When the Act requires a shareholder act, such as the annual financial statements or the appointment or removal of a director, he signs a written Class A resolution instead of holding the meeting. Appointing or removing a director is his decision alone. It is not a major matter (§4). Each year that resolution also waives the annual general meeting (s. 182).

Class J does not carry the right to vote, so Jacob W. does not sign these resolutions. A directors' resolution and a Class A shareholder resolution are different records, even when Albert Z. signs both (see §10).

4. Major Matters

Attention — major matters

This draft is not the list to adopt. Please, as part of this consultation, review and confirm the company's major-matter list.

The Articles adopt this list (see §8). The veto protects each founder's personal interest and keeps that interest from conflicting with the other founder or with the company. Each item needs the written consent of both classes: Albert Z.'s Class A and Jacob W.'s Class J. Neither founder can give the other's consent, and a Class A shareholder resolution does not replace it. Everything not on this list is an ordinary matter, which Albert Z. decides alone (§3). Appointing or removing a director is his decision alone and is not a major matter (§3.2). Changing the fiscal year end is his decision alone and is not a major matter. That date is not stated in the Notice of Articles or the Articles.

Amending the Notice of Articles or Articles
Issuing or transferring a share, admitting a shareholder, or a founder departure or buy-out
Approving or amending the shareholders' agreement
Declaring a dividend, including the amount on each class, or setting the company development reserve
Signing a client contract
Selling or assigning the company's intellectual property, other than a license to a client in the ordinary course
Selling the company, amalgamating or merging it, or winding it up
Changing the company's bank, or who may sign on an account
Appointing or removing an officer
Starting or ending a line of business
Commencing or settling litigation

A major matter needs the written consent of both classes. It is not a directors' resolution and not a Class A shareholder resolution. Class A is Albert Z.'s consent. Class J is Jacob W.'s consent. One signature is that class's consent, and the other founder cannot give it. Albert Z. may sign both a Class A shareholder resolution and, on a separate paper, the Class A veto consent (see §10).

The consents are separate classes because every share in one class must carry the same rights (s. 59(4)). One shared class could let one founder consent without the other. Each founder's dividend sits on the same class as his consent.

The Articles need to say that the sole director cannot do a listed major matter without both consents. Section 137 allows the Articles to move particular director powers. Section 61 protects a class when its own rights are changed. The drafting has to close the path on which Albert Z. uses a Class A resolution to drop the Class J veto. Both classes are issued on the day of incorporation so that neither consent is something the other founder can withhold later.

A shareholders' agreement can repeat the list and set the remedy if someone ignores it. British Columbia has no federal-style unanimous shareholders' agreement that removes directors' duties. Albert Z., as director, still has to act honestly and in the company's interests, with reasonable care (s. 142).

Attention — shareholders' agreement

Whether the company should have a shareholders' agreement is still to be decided. Please, as part of this consultation, give your professional opinion on whether the company needs one and what it should contain.

5. Shareholder Loans

The only way a founder may support the company financially is an interest-free shareholder loan. No other form is allowed. He must not pay money in for a further share, as a capital contribution, as a gift, or on any other basis. The one share each founder already holds is not that support.

The founder who lends decides the amount, and he lends only if he chooses to. Neither founder has to match the other. The amount does not set control. Albert Z.'s ordinary vote comes from holding the Class A share. The company records each loan as a liability. Repayment returns principal and is not taxable.

Each founder has chosen $2,000 as his first advance. Each signed copy of the agreement below has one lender, and that lender is either Albert Z. or Jacob W.

While the company is carrying on, a loan is repaid when that lender demands it or when the company chooses to repay. The company must not repay it if there are reasonable grounds to believe the company is insolvent, or that the repayment would render it insolvent. The company must not propose a dividend until every shareholder loan has been repaid. On a winding-up, other creditors are paid first. If what remains is not enough to repay both founders' loans in full, the two loans rank equally and the money is split in proportion to the unpaid principal. If $1,000 remains, Albert Z. is owed $3,000, and Jacob W. is owed $1,000, Albert Z. receives $750 and Jacob W. receives $250. If the company can repay both in full, each receives his unpaid principal.

This rule is written into the Articles (see §8). Changing it is a major matter (§4).

Attention — shareholder loan agreement

This draft is not an agreement to sign. Please, as part of this consultation, review and draft the company's shareholder loan agreement.

SHAREHOLDER LOAN AGREEMENT This Agreement is made on [DATE]. Lender: [Yansong Zang (Albert Z.) or Yiji Wang (Jacob W.)] [address] Borrower: [Company legal name], a British Columbia company [registered office address] The Lender is one person, and is either Yansong Zang (Albert Z.) or Yiji Wang (Jacob W.). 1. LOAN The Lender chooses whether to lend, and chooses the amount. The first advance is CAD $2,000. Any further advance is whatever amount the Lender chooses to pay to the Borrower's business bank account. The Lender is not required to match any other founder. 2. INTEREST Every advance is interest-free. No interest accrues at any time. 3. REPAYMENT The Borrower will repay the outstanding principal on written demand by the Lender, or earlier if the Borrower chooses. The Borrower must not repay if there are reasonable grounds to believe it is insolvent, or that the repayment would render it insolvent. The Borrower must not propose a dividend until every shareholder loan has been repaid. There is no penalty for early repayment. Repayment is a return of principal only. 4. WINDING-UP On a winding-up, other creditors are paid first. If what remains cannot repay every founder's shareholder loan in full, those loans rank equally. Each founder receives the fraction of the remaining money equal to his unpaid principal divided by the total unpaid principal of both founders. 5. NO SECURITY The Loan is unsecured. 6. RECORDS The Borrower will record the Loan as a liability and keep a running balance in its books. 7. GOVERNING LAW This Agreement is governed by the laws of British Columbia. Signed: Lender: ____________________ Date: __________ (Yansong Zang or Yiji Wang) Borrower: ____________________ Date: __________

6. Dividends

Attention — solvency test on dividends

For your review: under BCA s. 70, the company must not declare or pay a dividend if there are reasonable grounds to believe it is insolvent, or that the dividend would render it insolvent. A director who approves an offside dividend can be personally liable. If the test fails, the company declares no dividend for that period.

All contract revenue is paid into the company's Wealthsimple Business account (see §7.2). The company pays its own costs from that account. The only way the two founders share net profit is by dividend on each founder's own class. No other form is allowed.

The company must not pay either founder a salary, wage, bonus, director's fee, or management fee, and a founder does not invoice the company. An expense reimbursement and a loan repayment (§5) are not a share of profit.

Declaring the dividend is a major matter, so both classes consent before it is paid (§4). No dividend is proposed until every shareholder loan has been repaid (§5). The amount on each class may differ. Albert Z., as director, still applies the solvency test.

Setting the company development reserve is also a major matter. The reserve is an internal allocation of retained earnings, not a separate legal entity.

The ban is in the Articles. Changing it means amending the Articles, which is a major matter (§4), so neither founder can lift it alone. Whether a shareholders' agreement should also repeat the ban is still open (§4). The Articles do not adopt the Table 1 clause that lets directors set their own remuneration.

The ban binds the two founders. If the facts of the work are employment, the Canada Revenue Agency or the Employment Standards Branch can still require payroll. Dividends do not build CPP or EI, and the company cannot deduct them. Have a CPA confirm this pattern before the first dividend. Record every payment as a dividend, an expense reimbursement, or a loan repayment. An unclassified draw can be taxed as a shareholder benefit (Income Tax Act s. 15).

7. Business Operations

A&J Studio provides custom software and technology solutions for small and micro businesses — including application development, IT consulting, and technical support.

7.1 Operating model

The company works on a project basis. It sources opportunities among local small businesses and negotiates a contract for each engagement. Each contract sets out the core terms: project scope, payment method and amount, and breach/termination terms.

Find project opportunities among Vancouver-area small businesses
Scope and negotiate a per-project contract (template below)
Deliver the solution; provide agreed after-sales support
Route all client payments through the company account (see §7.2)

Attention — project contract

This draft is not a contract to sign. Please, as part of this consultation, prepare the company's standard project contract template or templates.

SERVICES AGREEMENT This Agreement is made on [DATE] between: Provider: A&J Studio [legal name], a British Columbia company [registered office address] Client: [Client legal name] ([contact name / title]) [address] 1. SERVICES & SCOPE The Provider will deliver: [describe the solution / deliverables]. Out of scope: [list exclusions]. Changes are handled under §6. 2. TIMELINE Start: [date]. Milestones / target completion: [dates]. 3. FEES & PAYMENT Total fee: CAD $[amount] (plus GST/PST if applicable). Schedule: [e.g., 40% deposit on signing; 60% on delivery]. Method: [e-transfer / bank transfer to the company account]. Late payment: interest of [X]% per month on overdue amounts. 4. CLIENT RESPONSIBILITIES The Client will provide [access, data, approvals, materials] in a timely manner. 5. INTELLECTUAL PROPERTY On full payment, ownership of the custom deliverables transfers to the Client. Pre-existing Provider tools/libraries remain the Provider's property, licensed to the Client for use of the deliverables. [Adjust as agreed.] 6. CHANGES Any change to scope, fees, or timeline must be agreed in writing. 7. CONFIDENTIALITY Each party keeps the other's non-public information confidential. 8. WARRANTY & SUPPORT The Provider will fix defects reported within [e.g., 30] days of delivery. After-sales support beyond that is [included / billed at $[rate]]. 9. LIMITATION OF LIABILITY The Provider's total liability is limited to the fees paid under this Agreement. No liability for indirect or consequential loss. 10. TERM, TERMINATION & BREACH Either party may terminate for material breach not cured within [e.g., 14] days' written notice. On termination, the Client pays for work performed to date. [Optional: deposit is non-refundable.] 11. GOVERNING LAW & DISPUTES This Agreement is governed by the laws of British Columbia. Disputes: good-faith negotiation, then [mediation/arbitration in Vancouver, BC / the courts of British Columbia]. Signed: A&J Studio: ____________________ Date: __________ Client: ____________________ Date: __________

7.2 Business banking

Open a Wealthsimple Business account after incorporation.

8. Articles

Attention — Articles

This draft is not the Articles to sign. Please, as part of this consultation, review and draft the company's Articles and Incorporation Agreement.

The Articles lock in the principles above. The filing does not upload them.

8.1 Incorporation filing

British Columbia does not use a separate company bylaw. The internal rules are the Articles. The online incorporation filing does not ask you to upload them. Before the filing continues, you certify that two documents already exist: a signed Incorporation Agreement and a set of Articles. Both stay in the minute book. Filing without them can leave the incorporation invalid.

What you submit through Corporate Online is the Incorporation Application and the Notice of Articles. The Notice of Articles is the short public record: name, registered office, directors, and the authorized share structure. After filing, the registry sends the Certificate of Incorporation, a certified Incorporation Application, and a certified Notice of Articles.

Table 1 of the Business Corporations Regulation (B.C. Reg. 65/2004, Part 15) is the default rulebook. The province's incorporation steps treat it as suitable when adopted unchanged. It does not create these two classes, the vetoes, or the decision to act by written resolution instead of a meeting.

8.2 What the Articles state

This company needs one set of Articles. Unmodified Table 1 is the wrong set to adopt. The sample Incorporation Agreement above only adopts Table 1 as written, so it is a pattern, not the document to sign.

The Articles have to state, in one document:

The two classes and their rights: Class A carries the right to vote at general meetings, receives Albert Z.'s dividend, and carries his veto; Class J does not carry the right to vote at general meetings, receives Jacob W.'s dividend, and carries his veto (see §2).
The Notice of Articles authorizes a maximum of one Class A share and one Class J share, without par value. The Incorporation Agreement issues the Class A share to Albert Z. and the Class J share to Jacob W.
A dividend may be declared on Class A, on Class J, or on both, in different amounts, and only after every shareholder loan has been repaid (see §6).
The company must not pay either founder a salary, wage, bonus, director's fee, or management fee, and must not adopt the Table 1 clause that lets directors set their own remuneration. Changing that ban is a major matter.
The only way a founder may support the company financially is an interest-free shareholder loan. No other form is allowed. The founder chooses whether to lend and the amount. While the company is carrying on, a loan is repaid on the lender's demand or when the company chooses, and the company must not repay it if there are reasonable grounds to believe it is insolvent, or that the repayment would render it insolvent. The company must not propose a dividend until every shareholder loan has been repaid. On a winding-up, if both loans cannot be repaid in full, they rank equally and the remainder is split in proportion to unpaid principal (see §5). Changing this rule is a major matter.
Only Class A carries the right to vote at general meetings. Albert Z. holds that share. He appoints and removes a director alone, and that decision is not a major matter (see §3).
Major matters. The Articles name the list in §4 and state that the company must not do any item on it unless both Class A and Class J have consented in writing. A directors' resolution does not satisfy that requirement. Class A's right to vote at general meetings does not replace the Class J consent, and Jacob W. cannot replace the Class A consent (see §4).
Ordinary mechanics may follow Table 1 only where they do not conflict with these principles. Board and shareholder business is done by written resolution, not by a meeting.

The Incorporation Agreement is a separate signed paper. Each incorporator agrees to take the shares set out in it, and the agreement adopts this custom set of Articles. It is kept with the Articles. It is not uploaded with the filing.

8.3 Company papers

Certificate of Incorporation
Notice of Articles (maximum of 1 Class A share and 1 Class J share) and Articles (class rights, the major-matter list, the ban on founder salary, and the shareholder-loan rule)
Incorporation Agreement
Shareholders' agreement, if the reviewing lawyer recommends one (§4)
Shareholder-loan agreements, one for each lender (§5)
Minute book (§10)
Project contract template (§7.1)
Registers (securities, directors, transfers)

9. Records & Filings

Records to maintain and recurring filings to stay in good standing. The fiscal year ends on December 31 (§1). Changing that date is an ordinary matter (§4).

Minute book: constating documents, and separate records for directors' resolutions, Class A shareholder resolutions, and Class A and Class J veto consents (see §10)
Central securities register; register of directors; register of transfers
BC registered & records office (a physical BC address)
BC Registries annual report (filed each year)
CRA T2 corporate income tax return, due 6 months after the fiscal year-end (June 30 when the year ends December 31)
Balance of corporate tax, due 3 months after the year-end for a qualifying CCPC (March 31 when the year ends December 31)
GST/PST registration and remittances as applicable
No payroll account for the founders. Founders share profit by dividend only (see §6)

10. Minute Book

Attention — minute book form templates

This draft is not a form template to sign. Please, as part of this consultation, prepare the company's directors' resolution, Class A shareholder resolution, and veto consent form templates.

The minute book records decisions. The company does not hold board meetings or shareholder meetings. It keeps the constating documents and three sets of forms: a directors' resolution (§3.1), a Class A shareholder resolution (§3.2), and a veto consent (§4). A page names its set. Albert Z. may sign more than one set for the same event: as director, as the Class A shareholder, and as the Class A veto. The samples are drafts for the lawyer to adapt.

10.1 Directors' resolution form

A directors' resolution records Albert Z.'s decision as sole director. He passes it in writing, in place of a meeting (BCA s. 140(3)). The scope is ordinary management. A listed major matter does not belong here.

DIRECTORS' RESOLUTION of [Company legal name] (the "Company") Written resolution of the sole director under the Business Corporations Act (British Columbia), s. 140, in place of a meeting. Date: [DATE] Director: Yansong Zang (Albert Z.) RESOLVED THAT: [State the ordinary-management decision. Do not use this form for a matter on the major-matter list.] This resolution is an act of the director only. It is not a Class A shareholder resolution and it is not a Class A or Class J veto consent. Signed: ______________________________ Yansong Zang (Albert Z.), sole director

10.2 Class A shareholder resolution form

A Class A shareholder resolution records a decision the Act or the Articles require the shareholders entitled to vote to pass. Only Class A carries the right to vote at general meetings. Albert Z. holds that share, so he passes it alone. Use this set when the decision is a shareholder act, not a board act. It does not replace a veto consent on a major matter.

CLASS A SHAREHOLDER RESOLUTION of [Company legal name] (the "Company") Written resolution of the holder of the Class A share, which carries the right to vote at general meetings, in place of a general meeting. Class J does not carry that right. Date: [DATE] Shareholder: Yansong Zang (Albert Z.), holder of all issued Class A shares RESOLVED THAT: [State the shareholder decision. If the matter is on the major-matter list, this resolution is not enough: also obtain the Class A veto consent and the Class J veto consent.] This resolution exercises Class A's right to vote at general meetings. It is not a directors' resolution and it is not a Class A or Class J veto consent. Signed: ______________________________ Yansong Zang (Albert Z.), Class A shareholder

10.3 Veto consent form

A veto consent is the written consent of one class to one listed major matter (§4). Class A is Albert Z.'s consent. Class J is Jacob W.'s consent. Each class is its own record. The company does not act on the matter until both consents are signed. Neither consent is a general-meeting vote, and Albert Z.'s right to vote at general meetings cannot stand in for Jacob W.'s Class J consent.

VETO CONSENT of [Company legal name] (the "Company") Written consent of the holder of the class named below to one major matter. Consent of the other class is a separate paper. Both are required before the Company acts. Date: [DATE] Class: [Class A — Yansong Zang (Albert Z.) / Class J — Yiji Wang (Jacob W.)] Matter: [Name the item from the major-matter list, and the specific decision.] The holder of the class named above consents to that matter. This paper is that class's veto consent only. It is not a directors' resolution and it is not a Class A shareholder resolution. Signed: ______________________________ [Name], holder of all the issued shares of the class named above

Appendix. BC BCA Compliance Review

Attention — appendix

This appendix is for your information and reference only. It is temporary and will be removed after this consultation.

A consolidated check of the arrangements above against the BC Business Corporations Act. "OK" means generally supported if documented properly; "Attention" means it needs a specific structure or professional setup to be compliant.

Item	BCA position	Status	Recommendation
Two classes, each combining that founder's dividend and veto	Permitted — one class may carry a vote, a dividend, and a consent right (ss. 58–60). Rights must be equal inside one class (s. 59(4)), so each founder has his own class.	OK	Class A carries Albert Z.'s right to vote at general meetings, his dividend, and his veto. Class J carries Jacob W.'s dividend and veto, and does not carry the right to vote at general meetings.
Only Class A carries the right to vote at general meetings	Permitted — authorize a maximum of one Class A share and issue it to Albert Z. (s. 53).	OK	Do the same for one Class J share issued to Jacob W. Record both in the securities register.
A dividend class for each founder	Permitted — each class may carry its own dividend right (ss. 58–59). The Articles may allow a dividend on one class and not the other.	OK	Albert Z. owns every Class A share. Jacob W. owns every Class J share. Both classes consent to the amounts. The solvency test still applies.
Both veto consents for major matters	A percentage vote cannot reliably mean "both people agree." Separate classes, each with one holder, can require that holder's own consent. Changing a class's rights needs that class's special separate resolution (s. 61). Particular director powers can be limited or transferred in the Articles (ss. 136–137).	Attention	Entrench both consents on incorporation. The company does not hold the meeting. A Class A resolution must still be unable to remove Jacob W.'s veto or stand in for it.
Ordinary matters decided by Albert Z. alone	The sole director signs a written resolution instead of holding a board meeting (s. 140(3)). He also signs any required Class A shareholder resolution. The company does not hold either meeting.	OK	Record ordinary management as directors' resolutions. Do not send those items to a shareholder vote.
Albert Z. as sole director; Jacob W. as officer only	At least one director is required (s. 120). No residency requirement (s. 124). An officer need not be a director (s. 141).	OK	Albert Z. qualifies as an individual 18+ and not disqualified. Jacob W. holds President and CTO without a board seat.
Reserve and dividends	Business decisions. A dividend must pass the solvency test (s. 70). The person who declares it can be personally liable if it does not.	OK	Both classes consent before a dividend is declared. No dividend is proposed until every shareholder loan has been repaid. Albert Z., as director, still has to apply the solvency test. The resolution sets the Class A amount and the Class J amount.
A shareholder loan is the only way a founder puts money in	No other form of founder capital is allowed. The amount is not share capital. Repayment of principal is not revenue.	OK	Write the rule into the Articles (see §5). While the company is carrying on, it must not repay a loan if there are reasonable grounds to believe it is insolvent, or that the repayment would render it insolvent. No dividend is proposed until every shareholder loan has been repaid. On a shortfall, the loans rank equally in proportion to unpaid principal.
Founders are paid only by dividend	The Articles may prohibit director and officer remuneration (ss. 136–137). A dividend still has to pass the solvency test (s. 70).	Attention	Write the salary ban into the Articles and make a change to it a major matter (see §6). Whether a shareholders' agreement should also repeat it is still open (§4). Have a CPA confirm the work does not require payroll.
Registered & records office; corporate records	A BC company must keep a BC registered & records office and statutory registers	Attention	Secure a BC physical address; maintain the minute book and file the annual report (§9).

Sources

BC Business Corporations Act, SBC 2002, c. 57 — definitions ("special majority", "special rights or restrictions"), ss. 59–61 (share classes and alteration of class rights), s. 70 (dividends/solvency), ss. 120 and s. 124 (one director; no residency requirement), ss. 136–137 (directors manage, and Articles may transfer particular powers), s. 140 (sole director may constitute a meeting; written director consent), s. 141 (officers need not be directors), s. 142 (duties), and s. 182 (annual general meeting). Tax points reference the federal Income Tax Act (e.g., s. 15). See bclaws.gov.bc.ca — BCA. Informational only; confirm with a BC corporate lawyer and a CPA.