“permit” means a certificate issued under section 32 certifying that the corporation named in the certificate is authorized to practice law in the province for the period specified in the certificate. (« permis »)
“voting share”, in relation to a corporation, means a share of its capital stock that entitles the holder to vote in any election of directors of the corporation. (« action avec droit de vote »)
“voting shareholder”, in relation to a corporation, means a person who owns a voting share of the corporation or is a voting shareholder of another corporation that owns a voting share of the corporation. (« actionnaire avec droit de vote »)
Authority of law corporation to practise law
31(1) A law corporation may practise law in Manitoba
(a) under its own name;
(b) as a partner of a partnership, each partner of which is entitled to practise law in Manitoba; or
(c) as part of any other type of law firm if permitted by the rules to the extent provided for in the rules.
How law corporation may practise
31(2) A law corporation may practise law in Manitoba only through members who are authorized under this Act to practise law in Manitoba.
32(1) Subject to subsection (2), the chief executive officer must issue a permit or a renewal of a permit to a corporation on being satisfied that
(a) the corporation is incorporated, formed by amalgamation or continued under The Corporations Act, and is in good standing under that Act;
(b) the name of the corporation includes the words “law corporation”;
(c) each voting share of the corporation is legally and beneficially owned by a practising lawyer or a law corporation;
(d) each other share in the capital stock of the corporation is legally and beneficially owned by
(i) a person who is a voting shareholder of the corporation,
(ii) a spouse, common-law partner or child, within the meaning of the Income Tax Act (Canada), of a voting shareholder of the corporation, or
(iii) a corporation each share of the capital stock of which is legally and beneficially owned by a person referred to in subclause (i) or (ii);
(e) each director of the corporation is a practising lawyer;
(f) the president of the corporation is a practising lawyer;
(g) each member through whom the corporation will be carrying on the practice of law is authorized under this Act to practise law in Manitoba; and
(h) the requirements in the rules for the issuance or renewal of the permit have been satisfied.
Refusal to issue permit
32(2) The chief executive officer may refuse to issue a permit or a renewal of a permit to a corporation if
(a) a permit of the corporation has been revoked; or
(b) a director, officer or shareholder of the corporation is or has been a director, officer or shareholder of a corporation whose permit has been revoked.
Business without permit prohibited
33(1) A corporation whose name includes the words “law corporation” shall not carry on any business unless it holds a valid permit.
33(2) Unless it is revoked, surrendered or suspended, a permit is valid for the period stated in the permit.
Restriction on business of law corporation
33(3) No law corporation shall carry on any business or activity other than the practice of law as authorized by its permit, and the provision of services directly associated with the practice. This subsection does not prohibit a law corporation from investing its own funds in real property, other than for development purposes, or in stocks, mutual funds, debt obligations, insurance, term deposits or similar investments.
Validity of corporate act
33(4) No act of a corporation, including a transfer of property to or by the corporation, is invalid merely because it contravenes this section.
Voting agreements void
34(1) An agreement or proxy that vests in a person who is not a member the authority to exercise any voting right attached to a share of a law corporation is void.
Unanimous shareholders’ agreements void
34(2) A unanimous shareholders’ agreement within the meaning of subsection 140(2) of The Corporations Act in respect of a law corporation is void unless each shareholder of the corporation is a practising lawyer or a law corporation.
Application of Act and rules
35(1) This Act and the rules apply to members despite any relationship they may have with a law corporation.
Obligations to clients not diminished
35(2) The fiduciary and ethical obligations of members, and their obligations respecting confidentiality and solicitor-client privilege, to persons receiving legal services
(a) are not diminished by the fact that the services are provided on behalf of a corporation; and
(b) apply equally to the corporation on whose behalf the services are provided and to its directors, officers and shareholders.
Liability of members
36(1) The liability of a member for a professional liability claim is not affected by the fact that the member is practising law on behalf of a corporation.
Liability of voting shareholders
36(2) A person is jointly and severally liable with a law corporation, or a corporation practising law in contravention of section 20, for all professional liability claims made against the corporation in respect of errors or omissions that were made or occurred while the person was a voting shareholder of the corporation.
Grounds for suspension or revocation of permit
37(1) Subject to subsection (2), a law corporation’s permit may be revoked or suspended, or have restrictions imposed on it, in accordance with the rules if
(a) the corporation ceases to meet any of the conditions for obtaining a permit;
(b) the corporation contravenes any provision of this Act or the rules;
(c) a member through whom the corporation has carried on the practice of law has been suspended, or has had restrictions imposed on his or her practice under clause 68(c); or
(d) a member, in the course of providing legal services on behalf of the corporation, does or fails to do anything as a result of which he or she is found to be incompetent or guilty of professional misconduct or conduct unbecoming a lawyer or student.
37(2) A law corporation’s permit shall not be revoked or suspended by reason only of the fact that
(a) one or more shares of the corporation have vested in
(i) an executor or administrator of the estate of an individual as a consequence of the death of the individual, or
(ii) a trustee in bankruptcy on the bankruptcy of the owner of the shares,
unless the individual or owner was the only member through whom the corporation was practising law or the shares continue to be vested in the executor, administrator or trustee for more than 180 days or any longer period allowed by the chief executive officer;
(b) the former spouse or common-law partner of a voting shareholder continues to own a share of the corporation after the end of their marriage or common-law relationship;
(c) a member’s right to practise has been temporarily suspended, unless
(i) the member remains a director or officer of the corporation for more than 14 days after the suspension begins, or
(ii) the corporation does not practise law through any other practising lawyer; or
(d) a lawyer has ceased, for any reason other than his or her death or bankruptcy, to be a member of the society, unless
(i) the lawyer remains a director or officer of the corporation for more than 14 days after ceasing to be a member,
(ii) the lawyer remains a voting shareholder of the corporation for more than 90 days after ceasing to be a member, or for any longer period allowed by the chief executive officer, or
(iii) the corporation does not practise law through any other practising lawyer.
References in other Acts, regulations, etc.
38 Unless expressly provided otherwise, a reference in any other Act or in any regulation, rule, by-law or order made under any other Act to a person entitled to carry on the practice of law or the practice or profession of a barrister or solicitor, whether as a barrister, solicitor, lawyer, member or otherwise, is deemed to include a reference to a law corporation.
Rules re law corporations
39 The benchers may make rules respecting law corporations, including rules respecting
(a) permits, including fees for issuance or renewal of permits;
(b) names of law corporations and partnerships whose members include a law corporation;
(c) the disposition of shares of law corporations owned by persons who are not eligible to own them;
(d) practice arrangements for law corporations as part of another type of law firm, including rules establishing conditions and requirements for these arrangements.