Business, Commercial and Corporate Law
We establish tax efficient business structures to help our clients achieve their goals of financial independence. We act as your trusted advisors every step of the way as your business grows from start-up to financial success.
Without carefully considering whether to buy the assets or shares of a business, you could end up with the wrong tax structure, the wrong organizational structure, and undisclosed liabilities for your newly purchased business. A confidentiality agreement or non-disclosure agreement can protect buyer and seller during the negotiation stage, regardless of whether assets or shares are purchased. A restrictive covenant can be used to prevent the seller from setting up a competing business after the sale.
If your business owes money to many different people, and is having trouble juggling the bills, you may require legal advice about dealing with your creditors. Options range from informal proposals to creditors, formal proposals, and bankruptcy. CRA which has a deemed trust for certain types of tax, other government departments, the bank, other secured, preferred and unsecured creditors, your employees, and your trade creditors all have different priorities to be paid by your business. You also have to avoid a fraudulent conveyance of assets, a transfer at undervalue, or a fraudulent preference or payment to one creditor, if your business is insolvent.
A breach of contract by one party may or may not release the other party from the contract. The status of any monies paid by either party prior to the breach must be determined. What each party does at this critical time will determine its legal position and any legal remedies such as monetary damages available to it in the future. In construction contracts, there may be builders lien provisions or trust moneys available to deal with any payment defaults.
Structure your new business to achieve your goals. Without legal advice, you may not realize the full potential of your business, and may risk your personal assets.
When buying or selling a business, you should get what you bargained for. Without legal advice, you may be in for an unpleasant surprise, and you may pay more tax than necessary. Section 85 or other rollover agreements can be used to acquire business assets on a tax deferred basis.
Effective corporate governance allows your organization’s leaders to lead by example. Without proper roles and responsibilities set out for leadership, your organization will be unable to achieve its mission or live up to its values.
As your business grows, its original structure may no longer be efficient from a tax, liability, or growth perspective. Corporate reorganization facilitates success as your business grows out of its start-up phase.
When your business grows to the point of becoming overly complex, it is time to restructure. Restructuring means changing the legal, ownership, operational or other structures of the company to make it more profitable, or better organized for its present and future needs.
Directors and officers of companies, charities, societies and non-profits may be held personally responsible for tax, environmental, and other statutory liabilities of your business. Directors and officers need to know what their personal liabilities are, and how to eliminate them or insure against them.
The basic rules governing most private sector employment in British Columbia are set out in the provincial Employment Standards Act and Regulation. Variances and exclusions are applicable to specific industries or types of work. Employment contracts define expectations and prevent messy lawsuits when employment ends. Success of your organization depends upon productive, fair and economically rewarding employment relationships.
Operating a business in which other family members are owners or employees creates both unique planning challenges, and opportunities for savings of tax. The simplest possible structure which recognizes the contribution of each family member and provides for tax effective compensation, can also provide flexibility for all family members going forward.
Fiduciary duties prevent conflicts of interest. Directors and officers are not permitted to take personal advantage of opportunities that rightfully belong to your business. Harsh consequences can follow breaches of fiduciary duty.
Growing your business takes money. We can show you how to move money into your business to pay for new equipment, inventory, staff, an expansion or an acquisition. We can uncover any hidden costs or traps in bank financing packages before you sign on.
When you are late in making a payment on the mortgage on your house or business, the financial institution has options on how to proceed. One option is a foreclosure of the mortgage, allowing the financial institution to regain legal title to your house, with you losing all your interest in the house. For a business, the financial institution has the option of appointing a receiver to assume control of your business, who will use the proceeds of the business assets to pay down the mortgage debt. The property owner should have a legal strategy for dealing with either a foreclosure or receivership.
Franchise agreements can offer valuable business opportunities, or they can seriously affect your financial well being. The terms of franchise agreements can be harsh, and the financial rewards may not be there. It is very difficult to get out of a franchise agreement. The new BC Franchises Act and Franchises Regulation offer considerable help in determining whether any particular franchise is a good investment. Franchise disclosure documents and statements of material change are now required in BC to assist in the investment decision.
Incorporation may be a good legal structure for your business. A corporation is a separate legal person, from you. You can own and control your corporation, while having limited liability for debts or obligations of the corporation. Family members can income split through a corporation, reducing the total family income tax burden. Doing it yourself is not recommended. There is a lot more to incorporating properly than filing some forms with the Corporate Registry. Having a lawyer incorporate your business means that a professional has taken legal responsibility for doing the incorporation correctly and securing for you all the benefits of corporate status.
Litigation or court proceedings can get so complex, intricate, dynamic and expensive that it is easy to lose the forest for the trees, to lose the overall objective, and to lose control over costs. A litigation manager or coordinator translates all the “court speak” for you as the client, keeps the litigation moving towards completion, monitors the total expense, and keeps the cost-benefit analysis firmly in line.
Access to capital for your business can mean borrowing from a bank, another financial institution, a friend or a family member. There are many types of secured and unsecured loans to be considered such as a commercial mortgage, a line of credit, or a general security agreement under the BC Personal Property Security Act. The type of secured or unsecured lending agreement, and the security taken for the debt, will determine the remedies of the lender on loan default.
Shareholder agreements cover how major business decisions will be made, how investments or growth strategies will be paid for, what shareholders loans will be made to the business, if and when bank financing will be used, employment of the shareholders in the business, shotgun clauses or rights of first refusal by which shareholders can be bought out, minority shareholder rights, valuation of each shareholder’s interest, the circumstances by which a shareholder leaves the business, and how disputes between shareholders will be resolved. The BC Business Corporations Act provides for a unanimous shareholders agreement, by which certain organizational and constitutional provisions for the company can only be altered by agreement of all shareholders, so that the power structure between the shareholders is not easily changed.
A society is a special kind of corporate structure, having limited liability protection for its members, used for non-profit endeavours. A grassroots project may grow to the point where it undertakes significant risks from which all participants must be protected. Societies can also enjoy tax exemptions. BC has new societies legislation that came into force November 28, 2016. All BC societies are required to file transition applications by November 27, 2018, with minor amendments to their charter documents, to bring themselves under the new legislation.
A succession plan for a family or small business, is a written agreement by which family members, employees, other shareholders in the business, or entrepreneurs outside the business, can assume control of the management and operation of the business from the current owner. This allows the goodwill, which is the reputation of the business among its customer base, to transfer to the new owners. The owner can sell the whole business at once, or can sell in stages as others are able to gradually assume all the responsibilities of the business. The owner may wish to exit the business to move to a new venture, retire outright, work part time, or be involved full time in the business in a different capacity. Tax planning allows the income tax burden on the owner to be significantly reduced or deferred, and may include an overall estate tax plan for the owner.
