Businesses are expected to follow the myriad laws set by the authorities. Therefore, whether small or big, businesses need an Lawyer to ensure they function properly and are compliant with the set laws. Issues such as property purchases and preparing taxes require legal help. Disputes and litigation require law expertise to prevent serious consequences, as well. This is where business Lawyers come in handy. They offer legal help to businesses. Below are other important benefits of hiring a business Lawyer Ottawa organizations can trust.
A Lawyer Will Provide Your Business with Advice
Business Lawyers help business owners to understand different legal issues, such as lawsuits and legal violations, that might impact their operations. They provide the required advice and legal guidance to help you come out of the legal situations or avoid breaking the law in the first place.
A Lawyer Can Facilitate Dispute Resolution
A business may fall into conflict with other establishments. In such instances, a business Lawyer will come up with legal options that are helpful to both parties. Note that litigation takes time and costs a lot of money. This is why it is vital to opt for mediation and arbitration. According to various reports, only 4% of cases of personal injuries are resolved through the court, while 96% are settled through negotiation. These private negotiations and conflict resolutions are preferable for a number of reasons -- and your Lawyer can help you achieve a favorable outcome.
A Lawyer Will Help Businesses Stay On Top of Legal Changes
With laws and regulations changing every day, it is quite hard to fully understand what is required of you as a business owner. This is where the business Lawyers come in handy. They help you to avoid violating the law. Business Lawyers also help to negotiate legally binding agreements such as partnerships agreements and leases. Essentially, a business Lawyer ensures that everything you do is in line with the law.
A Lawyer Can Navigate the Legal System
At some point, you may find yourself on the wrong side of the law. A business Lawyer will help you deal with legal problems as they arise. If you're facing a lawsuit, a Lawyer can ensure your rights are protected. An adept Lawyer can even tilt the dispute to your advantage. A business owner should never try to handle any legal disputes on their own, as this can end very poorly.
A Lawyer Can Connect You With a Specialist
If you are in need of specialized assistance, business Lawyers can refer you to the right professionals. Some cases, such as complicated tax matters, may require extra help. Lawyers are well-connected can direct you to a specialist who can provide guidance and assistance for all your business needs.
A Lawyer Can Help You Avoid Mistakes
Running a business is associated with numerous legal pitfalls. You are susceptible to making legal mistakes, regardless of whether you’re a rookie or an experienced business person. A good business Lawyer is well versed with business knowledge and pitfalls that you may come across. A business Lawyer helps you avoid major problems, some of which you may not even be aware of. Employment lawsuits can put your business profitability at risk. It is much better to prevent lawsuits before they occur instead of dealing with them later.
A Lawyer Can Ensure Your Contracts Are Sound
One of the most important things for a business is to ensure they have solid contracts. Otherwise, other entities may take advantage of incomplete or vague agreements. Solving cases that come as a result of this sloppiness can be very costly. Business Lawyers help to draft airtight agreements, hence avoid future disagreements and potential losses.
A Lawyer Can Make It Easier To Get Paid
Dealing with some partners, clients, and business associates can be quite stressful. Some people are reluctant to pay for services or supplies. If someone owes you money and they do not show commitment to pay you, consider using your business Lawyer. Ask the Lawyer to send a request on your behalf. Business Lawyers will not only motivate debtors to pay you, but they also know the steps to take in case they totally refuse to pay.
Businesses both small and big needs to have a business Lawyer. Corporate Lawyers do not only deal with lawsuits but also can help you with drafting contracts and operating the business in line with the law. They may also allow you to avoid costly legal action. For more information, please contact our firm today.
Frequently Asked Questions
I am negotiating to purchase a business and my business advisor has strongly suggested I structure the deal as an “asset purchase”. Why is this preferable?
There are two principal ways to structure the agreement of purchase and sale of a business: as an asset purchase or as a share purchase. An asset purchase is just that, a purchase of listed assets without taking on liabilities of the business. A share purchase, by contrast, is the purchase of the shares of the corporation that carries on the business and owns the assets. There are a number of considerations as to which form of purchase is preferable. In this article, we want to focus on why your advisor has strongly recommended an asset purchase.
A properly structured asset purchase agreement will allow you to purchase all of the desirable assets of the business you wish to acquire while leaving out the unwanted liabilities.
Your advisor has likely identified the business as one either by its nature or by the disclosure you’ve obtained in which there are significant potential liabilities that may be avoided through an asset purchase agreement. For example, if the owner of the business has been pocketing cash payments or using corporate assets for personal use, the business may be exposed to re-assessments and penalties by the Canada Revenue Agency. A purchase of shares would mean that you, through the purchased corporation, are exposed to those claims.
There are some exceptions to the avoidance of liability by an asset purchase. For instance, if the purchased business employed unionized labour, a collective agreement and any ongoing liabilities thereunder will follow the purchased business, even if structured as an asset purchase. Your legal counsel can assist you to identify and understand the relevant risks and how to avoid them where possible or otherwise obtain protection.
“I’ve been told I need a Shareholder’s Agreement - do you have a standard agreement I can use” is something we hear with frequency. It reflects an understanding by the client that a Shareholder’s Agreement is a “good thing”, but without an understanding of what that good thing is. Generally the response of legal counsel to this question is that there is no such thing as a “standard” Shareholder’s Agreement, let’s meet and talk. So what is it about Shareholder’s Agreements that are so valuable and why isn’t there a standard form, like a real estate agreement?
At a high level of abstraction, a Shareholder’s Agreement is a document that expresses the expectations of shareholders in respect of a corporation through legal obligations and rights. The task of the Lawyer in preparing the Shareholder’s Agreement is threefold - discerning what the expectations are (and those expectations are often not fully formed) – providing counsel on the legal and tax implication on the various alternatives by which those expectations may be realized - and expressing those expectations in the form of contractual terms that bind the parties.
For example, shareholders in a narrowly held private corporation may have an expectation that on death the shares will be purchased. In the absence of a Shareholder’s Agreement, this expectation may not be realized. There is no statute or common law requiring or obligating a purchase. If the remaining shareholders are unwilling to agree to a purchase, the estate is left with the shares and a tax bill. Nothing of course prevents the parties from negotiating a purchase, but the relative bargaining power may have shifted in unpredictable ways, and planning opportunities, such as insurance funding, may have been missed. A Shareholder’s Agreement that addresses these expectations will reflect the parties prior expectations for fairness, and will create certainty. Legal counsel will discuss alternatives including the corporate purchase of the shares, purchase by the remaining shareholders, and hybrids including spousal rollovers, the tax implications under the alternatives to the estate and to the remaining shareholders, the use of insurance funding, payment terms, security and so forth.
In family held corporations, expectations for succession (how management is succeeded) and liquidation (how the shareholding interests are turned into cash) are particularly difficult and require unique and sometimes innovative solutions. A Shareholder’s Agreement is a valuable tool in estate planning for resolving how competing expectations for liquidation and succession are accommodated.
I am a practicing family physician with two young children. My accountant mentioned the idea of incorporating my practice into a professional corporation. How does this work?
As a physician, you are generally permitted to create a physician corporation. The Ontario Business Corporations Act (OBCA) and the Regulated Health Professions Act govern physician corporations. Once incorporated, a Certificate of Authorization from the College of Physicians and Surgeons of Ontario (CPSO) is required for your professional corporation to practice medicine in Ontario.
There may be significant benefits to incorporation arising from income splitting through the payment of dividends to adult shareholders and the deferral of tax through retention of excess cash and investing in the corporation.
A professional corporation carries on the practice of medicine with you as both a shareholder and employee of your corporation. It is important to note that under the provisions of the OBCA, a professional corporation does not shield the shareholders from professional liability as acts of a professional corporation are deemed to be acts of the shareholders. Non-voting shareholders who are not members of the CPSO are exempted from any professional liability.
All voting shares of the corporation must be held by a member of the CPSO. Non-voting shares can be held by a parent, spouse or child (and minor children must have their shares held in trust). Professional corporations are only permitted to carry on the practice of the profession or activities that are related to or ancillary to the profession. Furthermore, a professional corporation is permitted to invest its surplus funds in passive investments.
A Lawyer with experience in incorporating professionals can help you set up your professional corporation such that your objectives may be realized.