Within the last month, another large-scale renoviction has started at another Michael Klein property in Lindsay Ontario:
Controversial Owner Of Apartments On Lindsay Street South Ordered To Cease Renovations Without Building Permit
News
In relation to the numbered corporation '1524256 ONTARIO LIMITED' that receives rent payments for 250 Frederick St. and for which Michael Klein is listed as director, it's worth making note of several details, some of which are recent changes to this corporation:
I've heard some tenants make what I believe may be unproved claims like 'This corporation was shut down for tax fraud', 'this company does not exist' etc. I do not believe there is sufficient evidence to make any of these claims, nor to I believe that they are the most likely explanation for this corporation's historical record of being 'dissolved'.
Furthermore, according to a record search performed on September 19th 2024, this corporation became 'active' again on July 5, 2024. Furthermore, 'MICHAEL KLEIN' is still listed as director, however the registered head office of the corporation has been changed from '2828 Bathurst Street, 104, Toronto, Ontario, Canada, M6B 3A7' to '140 Tycos Drive, Unit 100, Toronto, Ontario, M6B1W8, Canada'.
So what is the explanation for the dissolution and subsequent re-activation?
Here are the facts that we can establish from the available information in the corporate profile report and in public records published by the government:
So, what can be interpreted from the above information?
First, it's important to understand what an 'annual return' is. An annual return is NOT the same thing as a tax return. It is a very simple filing that corporations are required to file once per year in every jurisdiction (at the province and federal level) for which they are conducting business in. It's basically just a simple form that you fill out to report if any of your address or contact information has changed or not. It usually takes 5 minutes to complete and, it's also an opportunity for the government to charge you a fee (~$12 to $200) for the privilege of having a business.
If you don't file your annual returns for a few years to keep your contact and address information up to date, the government will assume you've just abandoned the business and go ahead and dissolve it for you.
The last time that 1524256 ONTARIO LIMITED filed it's annual return was on December 14, 2004, and the notice of 'Default Corporations Tax Act' was recorded on August 9, 2008 (around 3 years and 8 months after the last return filing). Three years is consistent with the approximate number of years you can expect to miss your return filings before the government will dissolve your corporation for you.
Furthermore, the December 13 cancellation notice indicates "Cancelled Request CT 241(4)"
Section 241 Business Corporations Act, R.S.O. 1990, c. B.16 is as follows:
Notice of dissolution by order
241 (1) If the Director is notified by the Minister of Finance that a corporation is in default of complying with any of the following Acts, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation remedies its default within 90 days after the notice is given:
Same
(2) If the Director is notified by the Commission that a corporation has not complied with sections 77 and 78 of the Securities Act, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation complies with sections 77 and 78 of the Securities Act within 90 days after the giving of the notice. 2017, c. 20, Sched. 6, s. 33 (2).
Same, non-filing
(3) If a corporation fails to comply with a filing requirement under the Corporations Information Act or fails to pay a fee required under this Act, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation, within 90 days after the notice is given, complies with the requirement or pays the fee. 2017, c. 20, Sched. 6, s. 33 (2).
Dissolution order
(4) Upon default in compliance with the notice given under subsection (1), (2) or (3), the Director may by order cancel the certificate of incorporation and, subject to subsections (5) and (9), the corporation is dissolved on the date fixed in the order. 2015, c. 38, Sched. 7, s. 44 (10).
The available information above in not specific enough to identify the exact obligation that was defaulted on, however, it is worth noting that corporations are also obligated to file their T2 tax returns, even when they have no revenue or activity during the year:
"All corporations - including non-profit organizations, tax-exempt corporations, and inactive corporations — have to file a T2 return for every tax year, even if there is no tax payable. "
Therefore, based upon the above information, the exact reason that triggered the dissolution could possibly be the lack of filing annual informational returns, or T2 tax returns (even when there was no business activity) or likely both of these.
Something that some tenants have suggested is that it may be illegal to operate as a 'dissolved' corporation. As far as I've been able to research this topic, I don't believe that is illegal, but I do think that it's inadvisable. The purpose of a corporation is to protect the directors and shareholders from personal liability. As far as I can tell, the most likely outcome would be that the directors of the dissolved corporation could become personally liable for judgements made against the business. This would allow the creditors of 1524256 ONTARIO LIMITED to Pierce The Corporate Veil and pursue Michael Klein personally for debts or judgements owed his business. For this reason, Mr. Klein has predictably filed Articles of Revival to restore the separation of liability that is provided by the aforementioned shell company.
In the event that there even was a judgement issued against '1524256 ONTARIO LIMITED' in the short period of time for which it was actively operating, but still dissolved, I suspect that a court would likely have granted Mr. Klein the opportunity to postpone the collection of any judgements against him personally, if he so requested, so that he could take the time to file articles of revival and restore the separation. In the event that he refused to revive the corporation or simply did not respond to the court, the risk of piercing the corporate veil would become much more serious.
In my opinion, I believe that '1524256 ONTARIO LIMITED' is probably just an old defunct shell company that Michael Klein had 'laying around' from an unrelated business activity that took place in 2002-2004. Shell companies are frequently created for legitimate purposes, such as to hold a piece of land or to act as a temporary vehicle for a merger. After 2004, this shell company no longer served any purpose and was left to be dissolved naturally, which took place in 2008. Starting around 2023, Mr. Klein needed a company to route rent payments through, and the easiest thing to do was to use '1524256 ONTARIO LIMITED' on the paperwork with the knowledge that he could simply revive the company if/when necessary, which is exactly what he did on July 5, 2024.
REMINDER: I am not a lawyer, and none of the above is legal advice. Check with a lawyer who practices corporate law before you rely on any of the information in the above post.
I've heard some tenants make what I believe may be unproved claims like 'This corporation was shut down for tax fraud', 'this company does not exist' etc. I do not believe there is sufficient evidence to make any of these claims, nor to I believe that they are the most likely explanation for this corporation's historical record of being 'dissolved'.
1524256 ONTARIO LIMITED Is Active Again
Furthermore, according to a record search performed on September 19th 2024, this corporation became 'active' again on July 5, 2024. Furthermore, 'MICHAEL KLEIN' is still listed as director, however the registered head office of the corporation has been changed from '2828 Bathurst Street, 104, Toronto, Ontario, Canada, M6B 3A7' to '140 Tycos Drive, Unit 100, Toronto, Ontario, M6B1W8, Canada'.
So what is the explanation for the dissolution and subsequent re-activation?
Here are the facts that we can establish from the available information in the corporate profile report and in public records published by the government:
- 1524256 ONTARIO LIMITED was initially incorporated on May 17, 2002.
- An initial return was filed on October 15, 2002 (presumably for the 2002 corporate year?).
- The second annual return for the corporation was filed (presumably late?) on December 14, 2004 for the 2003 corporate year.
- On August 9, 2008, an indication of 'Default Corporations Tax Act' was recorded on the corporate profile report.
- A public government record was published dated August 23, 2008 that indicates "The Director has been notified by the Minister of Finance that the following corporations are in default in complying with the Corporations Tax Act...unless the corporations listed hereunder comply with the requirements of the Corporations Tax Act within 90 days of this notice, orders will be made dissolving the defaulting corporations."
- A public government record was published dated December 1, 2008 that indicates "Notice Is Hereby Given that, under subsection 241(4) of the Business Corporations Act, the Certificate of Incorporation of the corporations named hereunder have been cancelled by an Order for default in complying with the provisions of the Corporations Tax Act, and the said corporations have been dissolved on that date."
- On December 13, 2008, the corporate profile report included a record for "Cancelled Request CT 241(4)"
- On July 5, 2024, a recorded was added to the profile report for "Articles of Revival July 5, 2024"
Informational Returns & Tax Obligations
So, what can be interpreted from the above information?
First, it's important to understand what an 'annual return' is. An annual return is NOT the same thing as a tax return. It is a very simple filing that corporations are required to file once per year in every jurisdiction (at the province and federal level) for which they are conducting business in. It's basically just a simple form that you fill out to report if any of your address or contact information has changed or not. It usually takes 5 minutes to complete and, it's also an opportunity for the government to charge you a fee (~$12 to $200) for the privilege of having a business.
If you don't file your annual returns for a few years to keep your contact and address information up to date, the government will assume you've just abandoned the business and go ahead and dissolve it for you.
The last time that 1524256 ONTARIO LIMITED filed it's annual return was on December 14, 2004, and the notice of 'Default Corporations Tax Act' was recorded on August 9, 2008 (around 3 years and 8 months after the last return filing). Three years is consistent with the approximate number of years you can expect to miss your return filings before the government will dissolve your corporation for you.
Furthermore, the December 13 cancellation notice indicates "Cancelled Request CT 241(4)"
Section 241 Business Corporations Act, R.S.O. 1990, c. B.16 is as follows:
Notice of dissolution by order
241 (1) If the Director is notified by the Minister of Finance that a corporation is in default of complying with any of the following Acts, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation remedies its default within 90 days after the notice is given:
- 0.1 Liquor Tax Act, 1996.
- 1. Corporations Tax Act.
- 2. Employer Health Tax Act.
- 3. Fuel Tax Act.
- 4. Gasoline Tax Act.
- 5. Land Transfer Tax Act.
- 6. Retail Sales Tax Act.
- 6.1 Taxation Act, 2007.
- 7. Tobacco Tax Act. 2004, c. 31, Sched. 4, s. 1; 2008, c. 19, Sched. V, s. 1; 2010, c. 1, Sched. 1, s. 12; 2018, c. 12, Sched. 2, s. 51; 2017, c. 20, Sched. 6, s. 33 (1); 2019, c. 15, Sched. 2, s. 29.
Same
(2) If the Director is notified by the Commission that a corporation has not complied with sections 77 and 78 of the Securities Act, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation complies with sections 77 and 78 of the Securities Act within 90 days after the giving of the notice. 2017, c. 20, Sched. 6, s. 33 (2).
Same, non-filing
(3) If a corporation fails to comply with a filing requirement under the Corporations Information Act or fails to pay a fee required under this Act, the Director may give notice to the corporation in accordance with section 263, or by publication in accordance with the regulations, that an order dissolving the corporation will be issued unless the corporation, within 90 days after the notice is given, complies with the requirement or pays the fee. 2017, c. 20, Sched. 6, s. 33 (2).
Dissolution order
(4) Upon default in compliance with the notice given under subsection (1), (2) or (3), the Director may by order cancel the certificate of incorporation and, subject to subsections (5) and (9), the corporation is dissolved on the date fixed in the order. 2015, c. 38, Sched. 7, s. 44 (10).
The available information above in not specific enough to identify the exact obligation that was defaulted on, however, it is worth noting that corporations are also obligated to file their T2 tax returns, even when they have no revenue or activity during the year:
"All corporations - including non-profit organizations, tax-exempt corporations, and inactive corporations — have to file a T2 return for every tax year, even if there is no tax payable. "
Therefore, based upon the above information, the exact reason that triggered the dissolution could possibly be the lack of filing annual informational returns, or T2 tax returns (even when there was no business activity) or likely both of these.
Consequence Of Operating A Dissolved Corporation
Something that some tenants have suggested is that it may be illegal to operate as a 'dissolved' corporation. As far as I've been able to research this topic, I don't believe that is illegal, but I do think that it's inadvisable. The purpose of a corporation is to protect the directors and shareholders from personal liability. As far as I can tell, the most likely outcome would be that the directors of the dissolved corporation could become personally liable for judgements made against the business. This would allow the creditors of 1524256 ONTARIO LIMITED to Pierce The Corporate Veil and pursue Michael Klein personally for debts or judgements owed his business. For this reason, Mr. Klein has predictably filed Articles of Revival to restore the separation of liability that is provided by the aforementioned shell company.
In the event that there even was a judgement issued against '1524256 ONTARIO LIMITED' in the short period of time for which it was actively operating, but still dissolved, I suspect that a court would likely have granted Mr. Klein the opportunity to postpone the collection of any judgements against him personally, if he so requested, so that he could take the time to file articles of revival and restore the separation. In the event that he refused to revive the corporation or simply did not respond to the court, the risk of piercing the corporate veil would become much more serious.
Final conclusion
In my opinion, I believe that '1524256 ONTARIO LIMITED' is probably just an old defunct shell company that Michael Klein had 'laying around' from an unrelated business activity that took place in 2002-2004. Shell companies are frequently created for legitimate purposes, such as to hold a piece of land or to act as a temporary vehicle for a merger. After 2004, this shell company no longer served any purpose and was left to be dissolved naturally, which took place in 2008. Starting around 2023, Mr. Klein needed a company to route rent payments through, and the easiest thing to do was to use '1524256 ONTARIO LIMITED' on the paperwork with the knowledge that he could simply revive the company if/when necessary, which is exactly what he did on July 5, 2024.
REMINDER: I am not a lawyer, and none of the above is legal advice. Check with a lawyer who practices corporate law before you rely on any of the information in the above post.
Last night, I received a message from someone who claims that they live at 141/149 Borden Avenue North in Kitchener, and that they (and several other tenants) received N13 notices on Friday, September 20, 2024. The address '141/149 Borden Avenue North in Kitchener' is another property where the names 'LUDMILA KARAKULOV' and 'MICHAEL KLEIN' appear on corporate filings and registrations.
A freedom of information request has been filed to view the permit applications for 4 construction permits at 250 Frederick St. Two of these applications appear to be for minor work and were filed by the previous owner, before it was sold to '250 Frederick Inc' on November 15, 2023. The other two permit applications appear to have been filed by the new owner: One is to create additional rental units in the building, and the other proposes to replace the plumbing stacks and install dishwashers in units:
The list of permit applications is as follows:
1) 24-110655 250 FREDERICK ST Plumbing Residential Plumbing Issued Permit is to replace existing plumbing stacks on floor 3 to 15 in an apartment building.
2) 23-128784 250 FREDERICK ST Residential Building (Multi) Apartment Application Permit is to convert amenity space into 4 new residential units on the 16th floor of an apartment building.
3) 23-101059 250 FREDERICK ST Plumbing Residential Plumbing Closed Permit is for a new back flow device on the domestic water line
4) 23-100726 250 FREDERICK ST Plumbing Residential Plumbing Closed Permit is for a new backflow device for the standpipe system with a new 6" DCVA in the water service room
The above list was found through the public search for 250 Frederick St. at this URL:
https://onlinepermits.kitchener.ca/portal/sfjsp?interviewID=PublicSearch
The list of permit applications is as follows:
1) 24-110655 250 FREDERICK ST Plumbing Residential Plumbing Issued Permit is to replace existing plumbing stacks on floor 3 to 15 in an apartment building.
2) 23-128784 250 FREDERICK ST Residential Building (Multi) Apartment Application Permit is to convert amenity space into 4 new residential units on the 16th floor of an apartment building.
3) 23-101059 250 FREDERICK ST Plumbing Residential Plumbing Closed Permit is for a new back flow device on the domestic water line
4) 23-100726 250 FREDERICK ST Plumbing Residential Plumbing Closed Permit is for a new backflow device for the standpipe system with a new 6" DCVA in the water service room
The above list was found through the public search for 250 Frederick St. at this URL:
https://onlinepermits.kitchener.ca/portal/sfjsp?interviewID=PublicSearch
This morning September 18, 2024, just before 10:00am, a representative of management stopped by and asked if I was interested in meeting with the building's management later today to discuss the N13 notices. This is the third time that someone has stopped by to pose this question. I responded by saying that management could submit any proposals in writing through my mail slot.
The first time was on May 2, around noon, just a couple days after getting my original N13 notice on April 30.
The second time was about a month after the first visit.
The first time was on May 2, around noon, just a couple days after getting my original N13 notice on April 30.
The second time was about a month after the first visit.
Today, I received an email from ACORN Canada. The email contains the following pieces of information:
A link to a form were users can voice their discontent in a message that will be delivered to representatives of Michael Klein buildings.
A list of times and locations for an event by Ontario ACORN on October 2nd for multiple locations that are afflicted by renovictions:
An associated Facebook event: https://www.facebook.com/share/EoH84P8ZNRZ8jam5/
A link to a form were users can voice their discontent in a message that will be delivered to representatives of Michael Klein buildings.
A list of times and locations for an event by Ontario ACORN on October 2nd for multiple locations that are afflicted by renovictions:
- Toronto - 994 O'Connor St, 1PM
- Toronto - 3 Torbolton Dr, 1PM
- Hamilton - 221 Melvin Ave 1PM
- Lindsay - 195 & 201 Lindsay St S - 1PM
- London - 1270 & 1280 Webster - 1PM
- Kitchener - 250 Frederick St - 1PM
An associated Facebook event: https://www.facebook.com/share/EoH84P8ZNRZ8jam5/
In relation to the two incidents on April 27th 2024 and April 29th 2024 where construction dust inadvertently triggered the fire alarm at 250 Frederick St., a freedom of information request has been filed to obtain incident reports for both events. Both incident reports are contained in this document.
As of 10:05am on September 11 2024, my leaking tap has been repaired, and the potential flooding hazard appears to have been resolved. Since the work has only just been done, I'll keep an eye on it to monitor for issues with the repair. At this time the repair appears to have been done satisfactorily, and the new tap functions normally.
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This web page was created, managed, and hosted by current resident Robert Elder, a 7-year tenant of 250 Frederick.