Robert Allan obtained his Bachelor of Commerce Degree (Honours) from Carleton University in 1983. He was awarded his law degree from Osgoode Hall in 1986 and was called to the bar in 1988.
With his 25 years of experience Robert’s approach is simple and direct: Get it done right and deliver value that exceeds the price of the service. His primary focus is business enablement and transactions, and wealth preservation. However, he is also an experienced estate advisor who provides business succession and liquidity, trust and multiple-will advice for moderate and high net-worth individuals. Medical and dental professionals who are considering incorporation also seek Robert’s guidance.
His services include assisting clients with:
- The purchase and selling of businesses
- Partnerships and strategic/alliance relationships
- Licensing and distribution agreements
- Business corporation and non-for-profit incorporation and re-structuring
- Securing venture and institutional financing
Born and raised in Ottawa, Robert is a dedicated family man who is active in the community. He was a vice president of the Nepean Chamber of Commerce, a co-founder and co-director of the National Capital Leadership Challenge, and a participant in the Fernbank Community Design Plan. Robert resides in Stittsville with his wife, and two daughters.
Frequently Asked Questions
“I recently learned that my elderly Aunt is a victim of Fraud. The police have advised me that some victims of the fraud are considering a lawsuit and that someone may wish to speak to a Lawyer on my Aunt’s behalf. My Aunt suffers from dementia and I hold power of attorney. Can my Aunt participate in a lawsuit?"
Special rules apply to lawsuits involving people, like your aunt, who suffer from a mental illness and therefore lack capacity at law.
Generally, children under the age of 18 and people who suffer from mental illness, including those who suffer from dementia, must be represented by a litigation guardian within legal proceedings. There are also special rules which apply to how limitation periods apply to persons who lack capacity at law.
Litigation Guardians assume responsibility for litigation on behalf of a litigant who lacks capacity. Litigation Guardians serve an important role and are saddled with significant responsibilities. They assume the responsibilities of retaining and instructing Lawyers on behalf of the incapable litigant, and litigation guardians assume personal responsibility for any costs liability incurred as a result of a lawsuit.
However, the litigation guardian plays an essential role in ensuring access to justice for some of society’s most vulnerable people. Without people agreeing to stand as Litigation Guardian people who suffer losses could be left without recourse to the courts.
Generally a Lawyer works very closely with a litigation guardian to ensure that risks are properly understood. Lawyers also put in place measures to ensure the risk of personal exposure to the guardian is minimized.
If you are asked to stand as a litigation guardian you should consult with a Lawyer before deciding whether or not to stand.
I want to become an entrepreneur and start a business. Should I incorporate now, or start as a sole proprietorship and delay incorporation to a later date?
The advisability of incorporation is dependent on the particular facts and personal preferences of the entrepreneur. The role of the Lawyer and other professional advisors is to help draw out the relevant facts and explore personal preferences to assist the entrepreneur in making the decision that is right for her. Some of the relevant factors include:
Risk. Is the proposed business inherently risky? The shield of limited liability that an incorporated entity provides to the entrepreneur is an important benefit (note that the shield from liability is not absolute);
Tax. A valuable attribute of an incorporated entity is the relatively low tax rate (approx. 16%) payable on the first $500,000 of net income. This allows a profitable incorporated entity to grow much quicker using internally generated working capital than a similarly sole proprietorship where a marginal tax rate in excess of 50% of profits may be payable. An exception is where the sole proprietor has other sources of income and it is anticipated that the new business will suffer losses in the start-up year(s) – it may be possible to set off the losses against the other income and thus reduce the overall tax burden;
Costs. Incorporation of the business at an early stage is less expensive than incorporation once the business is up and running. Once the business (sole proprietorship) is up and running it is generally necessary to use a “rollover” transaction to transfer the business from the sole proprietorship to the corporation.
Separate Existence. An incorporated entity has a legal existence separate and apart from the entrepreneur. This provides for a number of real and perceived benefits including (generally): broader alternatives for raising capital; easier salability of the business and possible availability of lifetime capital gains exemption to avoid tax on sale, continuous existence past the life of the entrepreneur, public perception of greater substance, and easier separation of personal and business dealings.
“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 the sole proprietor of a profitable construction business that I want to expand. I’m nervous about the risk associated with the business and its expansion. Should I incorporate?
We would strongly recommend incorporation. Incorporation provides you with limited liability to protect your personal assets from creditors, and tax advantages that will help you grow your business and your wealth.
A corporation is a legal entity distinct from its shareholders. The obligations, debts and liabilities of the business are those of the corporation and not of its shareholders. The protection from creditors is a significant advantage, particularly for businesses that are inherently risky. As the sole proprietor you are currently liable for every debt, liability, obligation and claim against your business. In your construction business, an inadvertent error or mistake by a sub-contractor, or simply the failure of the project caused by others, could result in huge liabilities for which you are personally exposed to creditors, risking loss of your house, savings and other assets. Incorporation of your business creates a significant barrier of protection. (Note: there are statutory and other limited exceptions to the protection provided by a corporation)
Active business income earned by a corporation is taxed at a much lower tax rate, approximately 15.5% in Ontario on income up to the small business limit of $500,000. This presents two wealth planning opportunities. Firstly, a growing business requires working capital. As a sole proprietorship, growing working capital is hard because profits are taxed at your personal marginal rate of taxation which may be in excess of 50%. By incorporating, you can grow your working capital, and thus expand your construction business, at a much faster rate because of the low rate of corporate tax. Secondly, by leaving profits in the Corporation in excess of your personal needs, you can grow your retirement savings in the corporation at a much faster rate. (In subsequent publications, we will talk about how to creditor-proof these savings).
A corporation provides for legal tax splitting with members of your family, if they are made shareholders of your corporation. The shares of your corporation may be structured so that you remain in control of the corporation notwithstanding shares issued to family members.
You should expect quite a lot. A Lawyer is both a professional, licensed in Ontario by the Law Society of Upper Canada, and a business person. As a professional, a Lawyer has a number of duties and obligations to you. Some of those duties include:
Your Lawyer should be knowledgeable and professional and provide a quality service. Talk to your friends, neighbors and associates about their experiences with their Lawyer. Many Lawyers will meet for an initial consultation at no-charge. Meet and make an assessment before you retain your Lawyer.
Confidentiality and Privilege
You should expect that confidential information that you disclose to your Lawyer remains confidential. Almost everything that you tell your Lawyer is protected by Lawyer-client privilege, which means that nobody can force disclosure of the contents of any communications between you and your Lawyer, subject to very limited exceptions.
You should expect your Lawyer to be responsive to your communications. Your Lawyer should promptly return phone calls and emails, or arrange for a time to meet where appropriate.
Your Lawyer also Runs a Business
This means that fees are charged to you cover the costs of operating the business, paying rent and assistants and providing a fair return for the Lawyer. Your Lawyer should have an open and frank discussion with you regarding fees and disbursements at the time of engagement. While it is not always possible to provide certainty regarding the fees that will be charged, your Lawyer should be able to provide to you an estimate or range based upon that Lawyer’s experience in similar matters. A signal characteristic of the relationship between a client and Lawyer is that of trust. A Lawyer is obliged to act on your behalf with complete fairness, honor, honesty, loyalty, and fidelity. Above all other qualities, you should expect, and obtain, full and complete trust in your Lawyer.
I made my own hand-written will few years ago. I believe it’s valid and truly reflects my wishes, however my financial advisor told me I should get a proper will drafted by a Lawyer. Why should I do that?
Wills are legal documents that will dictate the distribution of assets after one’s passing and there are many reasons why wills should be prepared by a Lawyer specializing in this area of law.
Formal validity For wills to be valid and legally binding they have to be executed (signed) according to legal requirements. A Lawyer preparing your will would ensure that the document is executed properly and therefore legally valid and binding.
Comprehensiveness A Lawyer can make sure your will deals with all important matters, such as appointment of executor(s) and alternate executor(s), distribution of your assets, appointment of custodians and guardians for your children and setting up trusts for minor beneficiaries. Your Lawyer will also ensure your will gives executors enough powers to properly and efficiently administer your estate and follow your testamentary wishes.
Reflecting all your legal obligation
Under the law you are obliged to provide for your spouse and your dependents. Your Lawyer can advise you of your obligations to such persons.
Clarity of language
A properly drafted will should use language that is clear and precise in order to prevent any issues with interpreting your instructions contained in the document. Your Lawyer will make sure that proper language is being used to avoid any ambiguities and clearly reflect your intentions.
Preventing future challenges to your will
Having a Lawyer draft your will significantly reduces any risk of future legal challenge to its validity based on your legal capacity or any undue influence. When your legal capacity might be an issue, your Lawyer will gather and keep all the required evidence to prove you had the necessary legal capacity to make a will. He or she will also ensure there is no undue influence from any individuals, including family members that would affect any of the provisions of your will.