Next question: how do I formally declare a shareholder? Say I want to issue my son 2% of class B nonvoting shares - how do I do this? I know it needs to be updated in the meeting book, and I can issue him a share certificate but do I have to declare anything to CRA, etc?
You need to pass a resolution of the board of directors authorizing the subscription of shares by your sign.
Board Resolution template here: http://www.lawdepot.ca/contracts/corporate-resolution/?loc=CA
Then you'll need to update your shareholder registry with his information.
Consult your accountant or a tax lawyer. There are tax rules about issuing shares in private corps to related parties.
If I want to issue him 2% of class B shares, do I have to hold the remaining 98% of class B shares? If so, how can I selectively issue him a dividend, but not myself a dividend. I know the whole point of having different classes of shares is so that I can selectively issue dividends, but how can I do this without issuing him 100% of class B shares?
You need to amend the articles of incorporation to create another class of shares:
Special shares in series 25. (1) The articles, subject to the limitations set out in them, (a) may authorize the issue of any class of shares in one or more series and may fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of, each series; and (b) may, where the articles authorize the issue of any class of shares in one or more series, authorize the directors to fix the number of shares in, and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series. R.S.O. 1990, c. B.16, s. 25 (1).
s. 168 of the OBCA has the procedure to amend the articles: http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90b16_e.htm#BK9
Also, how do I declare I own 100% of class A shares? Do I need to issue myself stock? Do I need to pay a nominal fee for said stock and record it?
When you incorporated, you (and your partners if any) were named as the directors of the first board of directors. That status provides you with the power to pass a resolution of the board issuing shares to you personally. So you need to pass a resolution of the board.
You need to pay some consideration:
Issuance of shares 23. (1) Subject to the articles, the by-laws, any unanimous shareholder agreement and section 26, shares may be issued at such time and to such persons and for such consideration as the directors may determine. R.S.O. 1990, c. B.16, s. 23 (1).
In terms of actually issuing dividends, is this the proper format: Over the year, give my son a shareholder, interest free loan - then at the end of the year, balance out the shareholder loan by issuing a dividend to nil out the loan to zero? How can I issue a loan? Can I just send him an interac etransfer and record it on the books as a loan?
I'm not going to comment on this except to say that there are tax considerations for providing interest free loans to related parties, particularly minors.
Side question what formally is a share certificate? Can it just be a piece of paper, or is it something more formal?
If you're registered under the OBCA as an Ontario corporation, these are the requirements from the Ontario Business Corporations Act (OBCA):
Contents of share certificate 56. (1) There shall be stated on the face of each share certificate issued by a corporation, (a) the name of the corporation; (b) the words “Incorporated under the law of the Province of Ontario”, “Subject to the Ontario Business Corporations Act” or words of like effect; (c) the name of the person to whom it was issued; and (d) the number and class of shares and the designation of any class or series that the certificate represents. 2006, c. 8, s. 113 (1).