Joint Tenancies in Estate Planning

Estate planning centres on finding ways to ensure as much of an estate as possible goes to the intended beneficiary with minimal loss to provincial Estate Administration Taxes and taxation.

Estate Administration Taxes (EATs) are calculated on the value of the assets someone passes on to beneficiaries through an estate, usually by way of a will. By carefully planning the distribution of assets among beneficiaries before death, people can minimize or defer taxes.

 

Paying some or all provincial EATs can often be avoided if parents register assets in joint tenancy with one or more of their adult children. The primary advantage of joint ownership is that the interest of the deceased co-owner does not pass though the estate but flows directly to the surviving joint tenant or tenants and so is not subject to EATs. Further, in passing outside of an estate, parties attempt to ensure that the asset in question will not be affected by claims against the estate pursuant to the Wills Variation Act. Typically, when someone transfers assets before death to be held jointly with a spouse or adult children, the transferor intends to retain partial or complete control over the use of the asset until death.

 

However, the act of registering assets in joint tenancy is only one part of the process. A number of factors can affect whether a joint tenancy is achieved.

    

As the two Supreme Court of Canada cases—Pecore v. Pecore and Madsen Estate v. Saylor—show, joint tenancies are not without problems. A transferring owner can, for example, lose control over the property and not be able to change his or her mind over its disposition or succession. In some cases, the property could be exposed to claims made by the new joint tenant’s creditors, including family claims if he or she becomes involved in a divorce or separation. And there could be tax implications in the case of real property such as a family home; future growth of the joint tenant’s interest in the residence would be subject to capital gains tax unless the joint tenant is the owner’s spouse or the owner’s child who is still living at home.

In Pecore, an aging father transferred financial assets consisting of bank and investment accounts into the joint names of himself and his daughter, who was one of his three adult children. He had been told by a financial planner that, by this action, he would avoid EATs and make after-death dispositions less expensive and cumbersome. Because he had been told that the transfers could trigger a capital gain, he wrote letters to the financial institutions holding the accounts stating that he was the 100% owner of the assets and that they were not being gifted to his daughter. The father made all the deposits and continued to use and control the accounts. He paid all of the taxes on the earned income. The daughter made some withdrawals. 

    

The father made out a will in which he left specific bequests, including one to the daughter’s ex-husband, but did not mention the particular assets that had been transferred into the joint names. After the father’s death, the ex-husband claimed that the daughter held the assets in trust for the benefit of her father’s estate (which totalled almost $1 million) and consequently they should be distributed according to the will. The trial judge found the father intended to give his daughter the ownership of the assets by transferring them into joint ownership. He continued to manage and control them on a day-today basis before his death. The SCC found the presumption of resulting trust was the general rule for such transfers and that the onus was placed on the daughter to demonstrate that a gift was intended. The outcome was the same, however, as the daughter did demonstrate the transfer was intended to be a gift and accordingly she retained the assets in question. 

    

In Madsen Estate v. Saylor, a father also transferred his investments into joint bank and investment accounts with his daughter. The father used and controlled the joint accounts and paid income tax on all of the income from the investments during his lifetime. The daughter did not make any withdrawals from the joint account during her father’s lifetime, although he did give her a power of attorney to allow her to manage his finances. 

    

The value of the joint accounts on the father’s death was about $185,000. He had made all of the contributions to the accounts. The daughter claimed the funds in the joint accounts by right-of-survivorship. But her brother and sister disagreed. Under their father’s will, he had directed his estate trustee to divide his estate into two—with one half divided among his three children and the other among his eight grandchildren. The siblings claimed that the daughter was holding title to the joint accounts as trustee for their father’s estate. In contrast to the Court’s decision in Pecore, the Court in Madsen agreed with the siblings and ordered the daughter to pay the $185,000 in the joint accounts back to her father’s estate, to be distributed in accordance with his will.

The common law has previously presumed that an asset other than land is owned as joint tenancy. However, Pecore, which has been cited with approval in British Columbia, spoke to the common law in three respects:

1. The distinction between joint tenancies in land and personal property has given way to a more modern approach whereby all assets are presumed to be held in trust for the estate.
2. Transfers between parents and adult children, dependent or independent, will be presumed to be for the purposes of holding the assets in trust for the estate.
3. If the presumption is rebutted, even when the deceased retained control over the asset, the transfer will be considered to have vested at the time of the transfer so the asset will not be considered part of the estate and subject to EATs.

It remains up to the surviving joint owner to rebut the presumption by providing evidence that the asset was intended to be a gift. 

    

While there are certainly occasions where putting property into joint names can be an easy and effective estate planning tool, such a transaction should only be entered into after appropriate advice has been received regarding the possible ramifications. It is also important to note that expenditure due to litigation over an estate is typically considered a cost of estate administration and therefore payable from the estate. As Pecore and Madsen demonstrate, it is critical not to leave intentions about estates open to interpretation in order to avoid unpleasant financial consequences.


Article reproduced from its original publication by Roger E. Holland and Elizabeth (Betsy) Segal of Singleton Urquhart LLP dated September 1, 2007.

Interesting Read: When a Will Turns into a Drama!

Lesson to be learned from the following celebrities' dramatic "wills and estate planning" stories: FIND A GOOD LAWYER & HAVE A WELL-DRAFTED WILL!

James Gandolfini and his $70 – million estate

Mr. Gandolfini, known for his role as tough but conflicted mobster Tony Soprano on the HBO series The Sopranos, died at 51, leaving most of his estimated $70-million estate to his 13-year-old son and infant daughter. This means a large portion could be subject to estate taxes; taxes would not be due if he had transferred his estate to his spouse.

Mr. Gandolfini’s son, Michael, is to get the largest chunk through a trust set aside for him until he turns 21. He’ll split his father’s Italian property with his half-sister, eight-month-old Liliana, when she turns 25.

The newspaper says the remainder of Gandolfini’s estate will be split among his wife, sisters and daughter. He left $200,000 each to his personal assistant and secretary.

Beneficiaries – from cats and dogs to doorman and nurse

If you type “millionaire leaves money” into the Google search bar, several beneficiaries appear: dog, cat, doorman, nurse. Hotel mogul Leona Helmsley left $12-million to “Trouble,” her Maltese (it was dropped to $2-million after her family contested). Italian property tycoon Maria Assunta left $13-million worth of cash and properties to her cat. Reclusive copper-mining heiress Huguette Clark left her private nurse $34-million and a doll collection. Music tycoon Alan Meltzer gifted $1-million to his former chauffeur and $500,000 to his doorman of 15 years. He divorced his wife, Diana who says “If he wants to give it to the bums, he can give it to the bums. He can give his money to whoever he wants. We’ve divorced. The man is dead.”

Millionaire died with no heirs and no will

Roman Blum, a Holocaust survivor and New York real estate developer, died without heirs or surviving family members, reportedly leaving his almost $40-million estate to, well, no one. Mr. Blum apparently had no will after he died in 2012 at the age of 97. If no relatives are identified, his money will pass to the state of New York.

“I have 400 emails from all over the world, even from Canada, most of them claiming to be relatives and making elaborate stories of how they got out of Poland,” Gary Gotlin, the New York public administrator handling the case says, “Somebody’s lying. He can’t have 40 daughters and 25 sons.”

Two alleged wills, one from a non-relative, another from Poland, have surfaced; the former will has been submitted to the courts. The public administrator’s office continues the global search for heirs.

This article was reproduced from its original publication on Financial Post dated Oct. 25, 2013 by Melissa Leong. 

Death and taxes: Leave your assets to your heirs instead of the CRA (article by Jamie Golombek of CIBC Private Wealth Management)

A great article written by Jamie Golombek of CIBC Private Wealth Management in Toronto published on October 25, 2013 in the Financial Post.  

Unlike the U.S., Canada no longer has any form of estate or inheritance tax. Yet despite this, death can trigger a significant income tax bill that, if not properly planned for, can leave an unexpected liability when a loved one passes away. Here is what happens to your non-registered and registered assets when you die:

Non-Registered Assets

The general rule for non-registered assets is that a taxpayer is deemed to have disposed of all his or her property, such as stocks, bonds, mutual funds and real estate immediately before death at their fair market value (FMV).

When the FMV exceeds the property’s adjusted cost base (ACB), the result is a capital gain, half of which is taxable to the deceased and must be reported in the deceased’s final tax return, known as the “terminal return.” There is an exception for the capital gain arising on the deemed disposition upon death of your principal residence, which is generally exempt.

For example, let’s say you die with a portfolio worth $1,000,000 that had an ACB of $400,000. The capital gain on the deemed disposition at death would be $600,000. Since only half the gain is taxable, tax would be owing on a $300,000 taxable gain. Assuming a 45% marginal tax rate for the year of death, $135,000 of taxes would be payable on the terminal return as a result of this deemed disposition.

If you own qualified small business corporation (QSBC) shares, a qualified farm or fishing property upon death, you can claim on your terminal return any remaining lifetime capital gains exemption (currently $750,000 but rising to $800,000 in 2014) against any capital gains arising from the deemed disposition of that property.

Perhaps the best way to avoid or at least defer this deemed disposition upon death is to transfer the property to the deceased’s spouse or partner, where applicable. When property is transferred in this way, the transfer can be done without triggering any immediate capital gains and the associated tax liability can be deferred until the death of the second spouse or partner (or until that spouse or partner sells the property, if earlier.)

So, continuing the example above, if you had left your portfolio to your surviving spouse, he or she would be deemed to inherit the portfolio at your original ACB of $400,000, deferring the $600,000 capital gain to the future.

Another opportunity to eliminate the tax arising from the deemed disposition at death is to consider leaving appreciated marketable securities to a registered charity through your will. The capital gains tax is completely eliminated when appreciated publicly listed shares, mutual funds or segregated funds are donated in-kind to charity.

For example, let’s say Warren owned publicly traded shares that were worth $30,000 as of the date of his death and had an ACB of $6,000. If he had willed those shares to his favourite charity, the capital gains tax would be eliminated on the $24,000 accrued gain, yielding tax savings of about $5,000, assuming a marginal capital gains tax rate of approximately 20%.

In addition, a charitable donation receipt for the FMV of the shares donated upon death ($30,000) would be issued which could produce a tax savings on the terminal return (or in the prior year’s return) of at least 40% ($12,000), depending on his province of residence.

Registered Plans

For many Canadians, however, the largest tax liability their estate will face is the potential tax on the FMV of their RRSP or RRIF upon death. The tax rules require the FMV of the RRSP or RRIF as of the date of death to be included on the deceased’s terminal tax return with tax payable at the deceased taxpayer’s marginal tax rate for the year of death.

This income inclusion can be deferred if the RRSP or RRIF is left to a surviving spouse or partner, in which case tax will be payable by the survivor at his or her marginal tax rate in the year in which funds are withdrawn from the RRSP or RRIF.

Alternatively, an RRSP or RRIF may be left to a financially dependent child or grandchild and used to purchase a registered annuity that must end by the time they reach age 18. The benefit of doing this is to spread the tax on the RRSP or RRIF proceeds over several years, allowing the child or grandchild to take advantage of personal tax credits as well as graduated marginal tax rates each year until he or she reaches the age of 18. If the financially dependent child or grandchild was dependent on the deceased because of physical or mental disability, then the RRSP or RRIF proceeds can be rolled to the their own RRSP or RRIF.

EVENT ANNOUNCEMENT: Invitation from HazloLaw - Business Lawyers “How to Set up Your U.S. Business” - Wednesday, November 6th

HazloLaw – Business Lawyers would like to invite you to join us for an exclusive presentation by our U.S. Business Lawyer, Ms. Renate Harrison on “How to Set up Your U.S. Business” at the Chateau Laurier on Wednesday, November 6^th at either 8:30AM or 2:30PM.

This is a great opportunity for entrepreneurs and professionals to find out more about the legal and practical aspects on setting up a business in the United States, the tax-related advantages and disadvantages of each type of business structure, and the legal implications of setting up a business in a particular state.

It is also a rare networking opportunity for you to meet other entrepreneurs and professionals from across the Greater Ottawa region.

Date: Wednesday, November 6, 2013

Time: 8:30am until 10am OR 2:30pm until 4pm

Location: Tudor Room, Chateau Laurier, 1 Rideau Street, Ottawa, K1N 8S7

Please RSVP before Friday, November 1 to admin@hazlolaw.com. In your email, please kindly indicate which time you wish to attend. If you wish to bring a guest, please provide us with the name of your guest. 

Raising Funds for Your Business

Corporate Financing

When starting a business, an entrepreneur has many factors to consider and important decisions to make early on. Those decisions will subsequently dictate the company’s operations and ownership structure. One of the most fundamental decisions to make early on revolves around financing, and how investors will be compensated for their monetary contributions. There exists many different ways of structuring the deal, however suitability is pivotal because these early decisions have lasting repercussions.

As a general rule, money is invested in a company with the goal of generating additional revenue. Depending on investor preference, risk tolerance and company outlook, an investor may look to structure the deal as a loan, as an exchange for company equity, or both. Every situation requires its own unique solution, and we will now analyze in further detail the different possibilities.

Debt:

 

An investor may elect to structure the deal as a loan, with interest payments due on the principal loaned to the company. This type of deal shows up on the company’s balance sheet as a liability, and the lender does not acquire any company ownership by virtue of the loan.

This can be advantageous for a corporation in its infancy, as company equity does not have any true value backed by assets or cash flow. As a consequence, the business owner will generally have to give up a larger portion of equity to compensate for the inherent risks of the loan. The disadvantage is that as opposed to issuing equity and bringing on a partner into the business, this type of deal is such that money is owed to a third-party creditor, who’s interest is repayment, not necessarily long-term company outlook. This translates into a more structured and rigid payback scheme, with significantly less negotiating power than if the lender was a part owner as well.

Equity:

• Common Stock: Issuing common equity in exchange for financing is seen very often in everyday business, and constitutes the sale of a portion of the business in exchange for money, good or service. If we focus in on the financing side of this type of deal, it is imperative that a business owner, especially at the early stages of operations, have a long-term business plan to structure the sale of common stock accordingly. For example, a business owner should validate whether the long-term goal is the sale of the company, whether the investor should be issued shares with voting rights, whether compensation will come in the form of dividends, capital appreciation of common stock etc. The idea behind long-term planning is to define a payout structure that matches investor and owner’s objectives, and to avoid punishment at a later stages due to excessive dilution.  
• Warrants: A stock warrant is very similar to a stock option, in that it grants the holder the option to purchase securities (usually equity) from the company at a specific price in a fixed time frame. Warrants are often included in new debt issue to entice investors.
  A note of caution, warrants will generally be exercised if the value of the company's stock is greater than the fixed price contained in the warrant. Giving out too many warrants early on can dilute share structure later, once the company starts generating positive value.

Hybrids:

• Preferred Stock: Preferred shares are the form of equity most similar to a debt-loan, as it carries many of the same characteristics. Preferred shares dividends are paid out before any other class of shares, but rank after bonds (debt) during liquidation. They contain no voting rights. The price and dividend of a preferred share is fixed, and does not appreciate or depreciate in value as common stock does. A corporation can structure their preferred shares with numerous different features. The preferred shares may be cumulative (entitled to dividends for periods where dividends were omitted), callable (company can buy back shares at a fixed price by a fixed date) or convertible. These different options can be used to structure the right deal based on the company’s needs.

•  Convertible Debenture:
  A convertible debenture is a type of loan issued by a company that can be converted into stock. Generally, because of the convertibility option, the company will pay a lower percentage of interest on the loan, compared to if there was no option to convert.
  
  An important point to distinguish between a convertible debenture and a convertible bond is that the debenture is unsecured, meaning that in the event of bankruptcy, a convertible debenture holder would be paid out after other debt holders (bonds, loans etc.)
   

 

There are many ways to structure your business financing. The most important part of the question, however, is picking the right one to suit your needs. All of the above options can be individual solutions, or coupled together to meet the company and investor's needs. Briefly, here is a general list of pros and cons to the different forms of financing:

 

Equity Financing:

• Advantages
• Less risky than a loan, as it dos not need to be paid back
• Investors take a long-term view, and generally don't expect a return on their investment immediately
• More cash on hand for expanding the business
• No requirement to pay back the investment if the business fails 
• Disadvantages
• The required rates of return from investors may be higher than the cost of a bank loan
• The investor will require some form of ownership
• The business will need to consult the investor before big decisions (and potentially routine ones)
• It takes time and effort finding the right investor for your company

Debt Financing:

• Advantages
• The lender has no say in company operations, as there is no ownership
• The business relationship ends once the money is paid back
• The interest on the loan is tax deductible
• Loans can be short or long term
• principle and interest are known figures, making it easier to structure the business's budget.
• Disadvantages
•  Money must be paid back within a fixed amount of time
• Carrying too much debt is seen as "high risk" by potential investors, potentially making it more difficult to raise capital later on
• Assets of the business can be held as collateral to the lender.

 



How does "Spousal Rollover" help you in tax-planning?

In King Group's most recent Newsletter, they cited an article written by Mr. John Mill, a Succession Tax Counsel called "Spousal Rollover - the Most Valuable Tax Plan?" Mr. Mill did a fantastic job outlining the benefits in tax planning with regards to spousal rollovers. Please see below for the article:

Much of the world’s wealth is created through capital gains. A capital gain is the increase in the value of an asset over time. The taxation of capital gains has two “top secret” wealth building features:

1)  Tax is deferred so that the compounding train stays on track;

2)  Only ½ of the increase in value is subject to tax – the other ½ of the increase in value is tax free.

But all good things come to an end – capital gains are harvested on the sale of the asset or the death of the owner. The tax on death arises as a result of a “deemed disposition”. When we say “deemed” we mean that there is no actual sale; instead CRA pretends there is a sale and then demands “pay up buster, or else!!”.  This somewhat insensitive demand creates two problems:

1)   The compounding train is knocked off the track;

2)   The lack of cash to satisfy CRA’s demand creates a liquidity problem.

Fortunately, if there is a surviving spouse, the Income Tax Act provides an automatic solution called a “spousal rollover”. A rollover means that the property can be gifted to the spouse and the tax will once again be deferred: the compounding train continues to chug along, and CRA ceases and desists with its demands.

When you consider that: there can be a multi-decade lag in the life span of spouses, and that this rollover applies automatically to everyone — the spousal rollover probably is the most valuable tax plan of all time. Whether or not that is true it is clear that spousal roll-overs are an important part of the succession planning tool kit. The purpose of this post is to take a quick jog through the key points of spousal rollovers so they may be more firmly held in mind.

The most important point is that the spousal rollover provisions are very generous and interpreted very broadly to include rather than exclude transactions. It is not often that CRA will raise issues with spousal rollovers. One famous case was the Supreme Court case of Lipson. In that case the lower income spouse used a spousal rollover to attribute losses to a higher income spouse, the Supreme Court found this to be a reversal of the purpose of the attribution rule and therefore abusive.

Spousal rollovers apply to gifts during lifetime and bequests on death. The difference is that any income generated during the life of the spouse making the gift is attributed back to them — attribution of income ends on the death of the spouse making the gift.

The definition of “spouse” is very wide including common-law and former spouses.

All depreciable and non-depreciable capital property is automatically rolled over to the spouse unless they elect out of the rollover. There is no form for such an election, instead you the election is made by reporting the disposition on the tax return of spouse who made the gift. This results in tax to pay; however the spouse receiving the gift gets an increase in the adjusted cost base of the asset meaning there will be less tax to pay when they sell or die.

In determining the extent to which it may be beneficial to elect out of the rollover and trigger tax in order to increase the adjusted cost base, the succession planner would consider whether the deceased has:

• personal credits and low marginal tax rates;
• net capital losses or non-capital losses that would otherwise expire;
• a capital gains deduction for qualified farm property or qualified small business corporation shares;
• donation credits or carry forward amounts; or
• alternative minimum tax credits carried forward from prior years

In addition to capital properties there are other properties including: inventories, resource properties, and registered plans (RRSPs, RRIFs) that qualify for spousal rollover treatment. The spousal rollover applies to almost any form of transfer to a spouse: court order; disclaimer; release; or surrender; and, may apply to jointly held property if each spouse rolls over their own interest in the property.

The spousal rollover can be to a “spousal trust”. The topic of spousal trusts will be the subject of a future post as there are many considerations, but the following discussion covers the basics.

Spousal trusts settled during the life of the gift giving spouse are taxed at the top marginal rate; whereas testamentary trusts made as a consequence of death are taxed at graduated rates resulting in a tax savings of about $15,000 per year. Also the 21 year deemed disposition rule does not apply to qualified spousal trusts. Once again over a potential multi-decade span a qualified spousal trust can be very valuable.

CRA has a set three conditions for a qualified spousal trust. These conditions seem confusing at first but they are really straightforward if you consider that these conditions are designed to mimic what would happen if the spouse owned the property without a trust:

   

• The first condition is that the property must “vest indefeasibly” within 36 months. A lot of confusion is caused by the fancy phrase “vest indefeasibly” but it simply means: there cannot be any future condition that would cause you to lose the property. In other words you can’t say: “… this property goes to my spouse until my daughter graduates from school”. If you think of normal property ownership the “vesting indefeasibly” concept is perfectly simple: you would never buy a car that is yours until a daughter graduates — it just wouldn't make any sense.
• Secondly all of the income must go to the spouse during their life. Once again this is what would happen if the spouse owned the property. Once the spouse receives this income they could do anything with it including giving it away.
• Thirdly none of the capital can be distributed to anyone other than the spouse during their lifetime. If you owned a bank account you would expect that the money in that account could be given away by someone else.

An important ‘heads up” for business succession planning is that a shareholder agreement requiring a partner to purchase and pay for shares directly from the estate instead of from the surviving spouse results in no rollover and potential loss of that spouses’ capital gain.

An important limitation of the spousal rollover is that you must be a Canadian resident to qualify. This means non-residents do not qualify; however, the Canada/US tax treaty extends Canadian spousal rollover privileges to US residents with Canadian spouses.

How to Re-Incorporate Your Business?

What is a continuance (import) of an incorporation and when does it come into effect?

•  A continuance (import) allows an incorporated business to effectively re-incorporate under another act. Because it is already incorporated, the legal process is called continuance. Instead of incorporating again, the incorporated business continues from one act into another so that it is governed by that other act as though it were incorporated under it. The process results in the corporation being exported out of one act and being imported into another.
•  The continuance comes into effect on the date shown on the Certificate of Continuance issued by Corporations Canada.

 Who can continue (import) under the Canada Business Corporations Act?

• An incorporated business must be incorporated under another act that is federal, provincial or territorial or is even from another country. That act must permit the continuance.

 What documents must be filed to continue (import) an incorporated business?

1. A completed and signed copy of Form 11: Articles of Continuance Opens in a new window;
2. a completed and signed copy of Form 2: Initial Registered Office and First Board of Directors Opens in a new window;
3. a NUANS Name Search Report External link, Opens in a new window for the proposed name of the corporation that is not more than 90 days old. If you have received prior approval of the name, attach a copy of the letter from Corporations Canada approving the name along with the copy of the NUANS Name Search Report. If the proposed name is a number name, a NUANS Name Search Report is not required; and
4. the filing fee, although there is no fee if the incorporated business is governed by another federal act.

The articles can be in English or French or in a bilingual format.

If the incorporated business is governed by an act that has been pre-approved by Corporations Canada also include:

• A letter of approval from the legislative authority that administers the act currently governing the incorporated business. This document is not required if the incorporated business is governed by another federal act.

If the incorporated business is not governed by another federal act or by an act that has been pre-approved by Corporations Canada, the following documents must also be filed:

• A letter of approval from the legislative authority that administers the act currently governing the incorporated business.
• A copy of the sections of the act under which the incorporated business currently exists showing that the continuance is permitted.
• A signed legal opinion by counsel qualified to practice in the jurisdiction where the incorporated business is incorporated, stating that: the non-federal law permits continuances to the CBCA, once the incorporate business is continued under the CBCA, the non-federal law will cease to apply to it, and in cases where the other legislative authority does not make it a practice to issue a formal authorization for continuance, the incorporated business meets all the requirements for export.

If you have any questions regarding the continuance of your business, please contact Hugues Boisvert for further information: hboisvert@hazlolaw.com, or 613-747-2459 ext. 304. 

What do I need a business lawyer for?

One of the most common misconceptions many people have about hiring a lawyer is that lawyers are mostly useful after problems have arisen - to settle disputes or to go to court. However, it is equally important (if not more important) to hire a lawyer before you are about to incorporate a business, draft your Will, form a company with your business partners, sign a contract with another party etc.... - having a lawyer before problems float onto the surface not only saves hundreds of dollars on legal fees compared to having to resolve the problems afterwards, it also gives you the peace of mind when matters can be simply left in the hands of a legal professional to handle on your behalf. After all, to prevent a problem from occurring is far less stressful and far more economic than to deal with a problem. 

So what is a "business lawyer"?

A "business lawyer" or a "corporate lawyer" generally refers to a lawyer who primarily works for corporations and represents business entities of all types. These include sole proprietorships, corporations, associations, joint venture and partnerships. Typically business lawyers also represent individuals who act in a business capacity (owners-managers, entrepreneurs, directors, officers, controlling shareholders, etc.). Further, business lawyers also represent other individuals in their dealings with business entities (e.g. contractors, subcontractors, consultants, minority shareholders, employees). 

You should seek a business lawyer if you or your company are . . .

- Starting a new business; (partnership, sole proprietorship or corporation)
- Issuing shares, stocks, options, warrants or convertible notes;
- Hiring your first employees (i.e. employment agreement);
- Negotiating a new lease;
- Acquiring another business;
- Reorganizing your affairs to save taxes (i.e. family trust, holding company, etc.)
- Transferring your business to you children and/or employee (Section 86 – Estate Freeze)
- Selling your company;
- Succession planning; (estate planning, estate freeze, primary and secondary will, etc.)
- Planning to create and develop new ideas, products and services;
- Seeking to resolve internal disputes. (i.e. shareholders agreement);
- Any other business/legal issues

Do I need a business lawyer?

A business lawyer can advise you of the applicable laws and help you comply with them.
A business lawyer can help steer you away from future disputes and lawsuits.
A business lawyer can help protect your tangible and intangible assets.
A business lawyer can help you negotiate more favourable business transactions.

Having a business lawyer can also project positively on your business. Further, an established relationship with a business lawyer can be invaluable when you need to turn to someone who knows your business for quick legal guidance.

Over the years, I have realized that many small businesses have genuine concerns about lawyers running up large tabs for unwanted, unnecessary or questionable work. Hence, I am extremely sensitive to that concern and actively work with you to control legal costs. I believe it is in both our interests to discuss the scope of work and the costs involved before I provide any legal services.

For any questions on the above, please contact Hugues Boisvert at hboisvert@hazlolaw.com, or call the office at 613-747-2459, ext. 304.