5 Mistakes to Avoid When Incorporating Your Business

Incorporating your small business is a big step and if done correctly, it can result in great growth for your business. However, you need to be aware of some common mistakes that small business owners tend to make when incorporating their business.

1.Not naming your business

Many people are so concerned with the process of incorporating their business that they may forget to choose a name for their company. This does not stop the corporation from operating, but instead an incorporation number is used as its legal identifier. This number is used in place of a name for all business-related activities. It is therefore recommended to prepare a company name beforehand, as it will help the growth of your business from a branding perspective.

6 Ways to Build a Successful Partnership

A partnership can be the make it or break it moment for many businesses. If done right, it can produce great growth and results. However, quite often a business partnership will end badly and not only ruin the business but relationships as well.

There are many important factors that need to be considered when choosing your business partner and addressing these issues can help establish a successful partnership.

1.Shared vision

The first and maybe the most important conversation with a potential partner should be about expectations for the business. It is crucial to understand what exactly each partner wants out of the business. Multiple conversations regarding expectations and goals will only prove beneficial in the long-term. There are many questions you should ask, such as:

Who can Challenge my Will?

A death in the family is often a very emotional time and although a Will may not be the topic of discussion at that time, it is nevertheless very important to know the basics surrounding Wills and potential issues that may arise. In almost every province, a testator is allowed to exercise almost complete discretion over the distribution of their estate. However, BC has some of the most sympathetic laws in all of Canada.

In BC, the Wills, Estates and Succession Act (WESA), provides dependents such as a spouse and/or child with a legal right to challenge a Will. Under s.60,

if the will-maker dies leaving a Will that does not, in the court’s opinion, make adequate provisions for the proper maintenance and support of the will-maker’s spouse and/or children, the court may order a provision that it thinks just and equitable in the circumstances.

Corporate Will | How To Minimize Probate Fees

Multiple Wills?

Most people in Canada don't have a single will, nevermind multiple wills, so why on earth would anybody need a corporate will? The reason is simple, corporate properties such as shares don't need to go through the process of being probated. Wills are normally probated or proven through the court.This is a court-approval process that takes time and cost money.

Transferring Your Business to the Next Generation

So, there are some common mistakes that people often make when they are transferring a business to the next generation. The biggest mistake is that business owners will set the value of their business at a dollar and sell it for a nominal value to the next generation because they essentially want to gift it to the next generation. The problem with this is that the Canada Revenue Agency (CRA) will take a look at that transaction and will assess the value of the shares at the actual fair market value of the shares. So, if the Canada Revenue Agency discovers that the actual fair market value of your business is a million dollars, then they will adjust the selling point of those shares from a dollar to a million dollars, which means that the seller will be hit with the capital gains tax on that amount.

Trademarking 101

What is a trademark?

A trademark is defined as letters, words, sounds, or designs that are used to distinguish one company’s goods and/or services from another. Over time a trademark evolves from representing goods and services to also representing the reputation of the company.

Types of trademarks

Ordinary trademark: includes words, designs, tastes, textures, moving images, mode of packaging, holograms, sounds, scents, 3D shapes, colours, or a combination of these are used to differentiate your goods and/or services from other companies.

Certification mark: can be licensed to multiple people or companies. They are used for the purpose of demonstrating that certain goods/services meet a defined standard.

What are the important tax benefits of a family trust?

Family trusts are both powerful and poorly understood structures that can provide significant tax benefits for high-income Canadians. Family trusts are a complex subject and should be reviewed in-depth with your accountant and your lawyer to determine if they are a good fit for you. Today I’m going to discuss two of the most important tax strategies that can be used through a family trust.

First, the multiplication of the lifetime capital gains exemption.

If your family trust is structured to own shares of your privately held corporation, you can multiply the lifetime capital gains exemption on the sale of those shares by making use of the exemption for each of your beneficiaries. A family trust with four beneficiaries, such as yourself, your spouse and two children, could potentially use the LTCGE four times, permitting you to enjoy an exemption of $3.5m on the sale of your company shares at 2020 rates.

Starting a Small Business in Vancouver

The prospect of starting your own business is a life changing step full of emotions. Many small businesses fail within the first five years and that is why it is important that you take all the necessary steps to protect your business and get it off the ground

1.Conduct market research

The first step should always include researching the market for the product or service you wish to offer. There are several questions you should seek to answer during this research stage. Start by determining if there is market/demand for the product/service you are planning to offer. You should also consider who your customers will be and if there are any competitors and who they are.

Family Trusts | What Is It & How Do They Work?

A family trust is a structure that facilitates the distribution of wealth to the beneficiaries named in the trust. Typically, your children, grandchildren, spouses are named as beneficiaries.

How does it work?

A trust agreement will set out a trustee and name one or more beneficiaries of the trust. A trustee is responsible for distributing the assets held within the trust, and typically has wide and even absolute discretion to determine who receives what, and when. A beneficiary may receive distributions from the trust, but they do not have a legal entitlement to those funds, which shores up the level of control that can be exercised over the trust funds.If you have more money than you need to live on during your lifetime, then you can give the funds to your children outright as a gift - but then you wouldn’t have any control over what they do with the funds. That’s ok for some people, but if you want to retain control over when those funds are used, a family trust can allow you to put aside funds for them and allow you to control when those funds are actually distributed to them - if at all. This can be helpful if you have, for example, a disabled child or a child that you don’t trust to use the funds wisely.

5 Reasons Why Using Free Legal Contracts Isn’t Helpful

Free legal contracts are widely available online and using them may seem like the perfect way to save money while protecting your business. However, free legal contracts can end up costing you more while not protecting your business as you had hoped. Here are a few reasons why you should not use free legal contracts.

1.Choosing the wrong contract

Free legal contracts are available for you to use at your discretion. Most people will select one based on the title, but this may result in different consequence than intended. This means that your small business may not have the protection that you think it does. Each contract has important differences and determining which one is best suited for your particular situation should be discussed with a small business lawyer.

Commercial Leases in Vancouver

Signing a commercial lease is a big step for your small business. A lot goes into this process and it is important that you have all of the necessary information before signing. Here are some important factors you should consider after you have found a property that you like.

Seek legal advice

A small business lawyer can assist you in many ways when it comes to starting up your small business and maintaining it. This is especially true when it comes to negotiating and drawing up contracts. A small business lawyer will not only get you the best deal possible, but he/she will also ensure the terms of the contract provide you and your business with protection.

Should I Incorporate my own Company?

It is possible to incorporate yourself. You can do this without any legal help as BC has an online incorporation system. It is important to note however, that even with online resources, it is still possible to make mistakes before, during, and after your incorporation.

Common mistakes

Although the government website provides forms for incorporation, this does not include all of the forms that you require. Relying on government-provided forms alone will not be sufficient for you to incorporate your company. In addition, the forms or online incorporation system may prove confusing to some people and a small business lawyer can help clear up that confusion. There is also the possibility that you may make mistakes when completing the forms and that is why it is always good to have a lawyer look them over.

Key Elements of a Strong Shareholders’ Agreement

A shareholders’ agreement can go a long way in helping set up your business for long-term success. Thinking about unpleasant situations is never fun but it will help in the long run if and when these situations arise. Putting in place a shareholders’ agreement will equip you and your fellow shareholders with the necessary tools to tackle those situations. Here are some elements that should be included in all agreements.

Process for appointing directors and their duties

This section should outline how directors will be appointed. Some examples include each shareholder appointing a director, each class of shares appoints a director, or appointing them through a majority vote. Potential investors may also want a representative on the board, so that must be considered. The responsibilities of the directors should also be laid out clearly.

What is Power of Attorney | Why it is Essential Part of your Estate Plan

What is a Power of Attorney?

A power of attorney is a legal document that grants power to somebody else to make decisions for you on a financial and legal basis so they can manage your bank account, your investments, real estate that you might own and make other important legal decisions. This is a document that needs to be prepared by a lawyer and it's an essential part of an estate plan.

So what happens if you don't have a power of attorney?

If you don't have a power of attorney then in the event that you become incapable of physically or mentally managing your affairs, then nobody will be able to make those decisions on your behalf.

What Is Fair Market Value – What does this really mean?

A public company is one whose shares are freely traded on the stock exchange. Because the shares are traded on the stock exchange, the price of shares can be easily ascertained online. This is not the case with private companies. They do issue shares and have shareholders, but these shares are not traded on public exchanges, thus, making it much harder to determine the value of these shares. However, determining the fair market value of these shares on a regular basis is important when it comes to dispute resolution, taxes, obtaining insurance and a variety of other circumstances.

Fair market value

Fair market value is essentially the price an asset would sell for on the open market. However, certain conditions need to be met for the price to be considered fair market value. First, the buyer and seller must be well informed about the asset. Next, they must be acting in their own best interest and this must be free of undue pressure. Finally, the transaction must not be too rushed so that the parties have time to make an informed decision.

What is a Shareholders' Agreement | Why They're Essential To The Success Of Your Business

These agreements are some of the most notorious agreements because they are very challenging for clients to actually get around and sign. They're very long. There can be 15 to 60 Pages. They contain a lot of language that is very difficult for a non-practitioner to understand and they just seemed like something that just gets pushed to the end of the list. It's one of those things that you know is good for you but you just don't want to get done. It's kind of like going to the dentist. So let's take a look at these agreements because while they're not all that sexy they're extremely important and they can be essential to the success of your business over the long haul.

Termination without Cause – Know your rights?

Termination with cause is reserved for serious workplace misconduct. In such a case, as an employee you are not entitled to notice of termination or severance pay. Almost every other scenario is classified as termination without cause. As an employer under the BC Employment Standards Act, you have the right to terminate an employee at any time for any reason as long as it is not discriminatory and you provide appropriate notice and/or severance pay. It must be noted however, that as an employee you are only entitled to notice and/or severance pay if you have been employed by that company for a minimum of 3 consecutive months. Additionally, as an employer you are not required to provide any supporting documents for a termination without cause.

Understanding Your Employee Stock Options

Today we're going to talk about employee stock option plans.

Difference between options & shares

Before we get into that, I'm just going to break down what the difference is between options and shares. So shares quite simply they represent an ownership stake in a company. So say a company has 100 shares that means there are 100 ownership stakes in that company and each of those shares is going to be worth 1% of the company. So whereas an option, an option is a right to purchase one of those shares in the company. It's not an obligation to purchase them when you receive options, you're holding that ability to purchase shares in the company at a later date and generally how options work is that they have a strike price; a strike price or also called an exercise price and that price is going to be, hopefully below what the market value of the shares is.

Why you need a Shareholder’s Agreement

Growing your small business is exciting, but it can just as easily come to an end if the proper steps aren’t taken to protect yourself and the business. A great way to do this is by putting together a shareholders’ agreement. This can help ensure that the shareholders are on the same page, while protecting all members and the business itself.

What is a shareholders’ agreement?

A shareholders’ agreement is a formalized agreement between most if not all of the shareholders of a corporation. This agreement outlines how the business should operate, as well as the rights and responsibilities of the shareholders. A shareholders’ agreement is not the same as company articles or bylaws, which are mandatory, and a shareholders’ agreement is optional. The shareholders’ agreement is a private agreement that members of the public do not have a right to inspect, unlike the company’s articles.

What Happens If You Die Without a Will? | 3 Important Things You Need to Know

3 important things you to know about the importance of having a Will.

1) Common Scenarios

- The first thing to know about dying without a will is that the distribution of your estate is, of course, going to be very unclear. The default rules of the Wills Estates and Succession Acts are going to apply and so I'm going to cover off some of the common scenarios here.