Category: Business Law

Providing you with valuable information on laws and agreements pertaining to your business. Topics may include information on incorporation, shareholder’s agreements, partnership agreements, buying a business, etc.

5 Legal Tips on How to Start a Business Partnership

/ Mark-John
Business Partnership Agreement

If you are interested in forming a business partnership, please review our five legal tips on how to form a business partnership below:

1. Begin by assessing whether a partnership is the best way to structure your business.

One of the principal benefits of a partnership is that it allows you to pool resources together.

However, you should keep in mind that each partner is responsible for all debts and obligations of the business (with the exception of a limited partnership – see below).

Further, a partner may be found liable for the wrongs committed by other partners or the employees of the partnership if those wrongs were committed in the course of the business.

Other options available to your business are a proprietorship and incorporation. Read more about the different options for structuring your business here.

2. Consider entering a limited partnership.

In a limited partnership a single general partner operates the business and holds unlimited liability with respect to the business’ debts.

The general partner is supported by other “limited partners”, whose liability is limited to the amount of capital they contribute to the business.

3. Consider a limited liability partnership as an alternative to a limited partnership or general partnership.

It is similar to a limited partnership except that there is no single general partner with unlimited liability.

All partners have limited liability that matches their contributions to the business. In some provinces, only certain professionals can enter into a limited partnership.

There are no such restrictions under the British Columbia Business Corporations Act.

4. Be clear about how you are financing the partnership.

In some cases partners will provide equal contributions to the partnership.

However, in situations where there are unequal contributions, you may choose for this to be reflected in the share of earnings each partner is entitled once the business turns a profit.

5. Partnership agreements can be beneficial.

While there is no legal requirement that you execute a partnership agreement, you may find it beneficial to have one in place, as it provides greater certainty to each party about their rights and responsibilities with respect to the partnership.

Read more about partnership agreements here.

With years of experience M.J. O’Nions, Lawyer & Mediator can help you set up your partnership, register it, execute a partnership agreement and provide you with advice all along the way. Please contact us at 604-449-7779 for assistance with your partnership.

What Do Business Lawyers Do? Why Do I Need A Business Lawyer?

/ Mark-John

Thinking of setting up a business and not sure where to begin? Conferring with a business lawyer will most certainly make your process of setting up a business easier in the following ways:

Choosing a Business Structure:

One of the initial decisions of setting up a business is deciding whether you are setting it up as an individual, a partnership or a company. One may also be confused about which structure is appropriate in their circumstances. A business lawyer can not only suggest which business structure is appropriate in their client’s circumstances, but also go through the available choices of business structures and any liability issues associated with them. For example, if a person intends to carry a business alone, he/she may set up a business as a sole proprietorship or a company. Whereas, if a person intends to carry a business with 1 or more persons, then he/she may choose from a variety of business structures, namely general partnership, limited partnership, company and limited liability partnership.

Assisting with Incorporation:

Once a decision about an appropriate business structure is made, a business lawyer can then assist you with incorporating your business. Depending on your incorporating jurisdiction, there are many legal requirements to comply with, such as the number of directors that must reside in a given jurisdiction. A business lawyer will inform you of such legal requirements and ensure compliance.

You may also find it useful to discuss other topics with your lawyer, including the name requirements in your jurisdiction and whether you need to protect your name with a trademark. Other topics include understanding compliance with annual maintenance requirements and, if it is a corporation, duties of directors, partners and minority shareholders.

Advising on General and Specific Business Practices/Transactions:

Whether your business is small or large, you should seek assistance from a business lawyer on any matter relating to my business. The earlier the involvement of a lawyer however, the better it is as business lawyers can assist with due diligence, spotting legal issues before they arise and presenting possible solutions to those issues.

Acquiring or Selling a Business or its Assets:

Business lawyers play a critical role in assisting you with acquiring or selling shares of a corporation or a partnership or acquiring or selling assets of a business. The two ways to achieve such a sale or purchase is through a share purchase or an asset purchase agreement. Whether you are the buyer or the seller, a lawyer can assist with conducting due diligence in the transaction, negotiating on your behalf, and carefully draft the agreements to ensure they are reflective of your expectations.

Resolving Disputes:

A dispute can arise in the lifetime of a business among different individuals involved in that business or between other businesses that it deals with. A role of a lawyer in resolving a business dispute is strategic in that he/she will consider every option that is available to resolve that dispute efficiently including, litigation if necessary.

Drafting Contracts:

Business lawyers are equipped at reviewing and drafting contracts and agreements to ensure they accurately reflect the intentions of the parties. Such agreements include shareholders’ agreements, partnership agreements, sales contracts, employment agreements, non-disclosure agreements, sub-contractors’ agreements, financial agreements, etc.

Conclusion:

As mentioned earlier, involving a lawyer from the outset of your business will ensure that legal compliance with the incorporating jurisdiction is met, annual maintenance requirements of the business are adhered to, and any potential disputes are discovered and prevented as much as possible. However, engaging legal counsel at any point during business planning, completing a business transaction, or resolving a dispute is always an option that is available to businesses.

We hope this article helps answer your questions about the role of business lawyers and why you need one.

If you have further questions or need legal assistance with incorporation, or drafting a general business contract, partnership agreement, shareholders’ agreement or purchasing or selling a business, please do not hesitate to contact MJ O’Nions Lawyers & Mediators at 604-449-7779.

 

How to Incorporate a Small Business in British Columbia

/ Mark-John

How to incorporate a small business

Incorporating a small business can be done fairly quickly with the help of a lawyer. While there are a number of steps involved, M.J. O’Nions Lawyer & Mediator has streamlined the process so that from the time of the initial appointment with our firm, the incorporation can be completed within one day. The steps involved in incorporating a business generally are as follows:

Consider whether incorporating your company will help you meet your business goals or whether another business structure may be better suited, such as a proprietorship or general partnership.

1. Decide which jurisdiction you would like to incorporate under: British Columbia, federal or another province. This decision will depend primarily on where you plan on carrying on business and whether you will be carrying on business in more than one province.

2. Perform a corporate name search to ensure the name you want for your corporation is not already in use. Submit your name choice, along with two back-up choices to the Registrar of Companies for approval. A company name must have a distinctive element, a descriptive element, and a corporate designation (i.e. “Limited”, “Incorporated” or “Corporation” or the abbreviations “Ltd., “, “Inc.” or “Corp.”).

3. Decide on a share structure, including the number of shares to be issued in each class and the issue price per share. Issue share certificates and obtain written confirmation of payment for incorporator’s shares.

4. Select the director(s) and obtain written consent to act as director. The director will be responsible for overseeing the officers who are in charge of day-to-day operations and the corporation’s employees. The number and qualification of the directors should comply with the Business Corporations Act. Update the Register of Directors with the names and addresses of the newly appointed directors.

5. Draft an incorporation agreement, incorporation application, and notice of articles, and articles. The terms of such documents are typically fairly standard, however you may wish to make changes to provisions regarding quorums for general meetings, rules about notice and conduct of general and class meetings, rules relating to appointment or removal of directors, etc.

6. Draft the director’s resolutions and incorporator’s resolutions, which authorize the incorporation, and have them signed by the appropriate individuals.

7. Register the corporation with the Corporate Registry online.

8. Prepare a minute book that contains all company records that are required to be stored at the records office under s. 42 of the Business Corporations Act.

While the process for incorporating a company is streamlined, you will have to make a number of important decisions along the way about how you would like to structure your business.

Included in our flat fee, M.J. O’Nions, Lawyer & Mediator can advise you on how to make decisions that will benefit your small business in the long-term and encourage your business to grow. Please contact us at 604-449-7779 for assistance with incorporating your business.

What You Should Know About Business Partnership Agreements

/ Mark-John

If you have entered into a business partnership or are contemplating one, you may be wondering whether you need a partnership agreement.

Small Business Partnership Agreement

A partnership agreement is a written agreement of two or more individuals who have decided to carry on a for-profit business. The agreement sets out the rights and responsibilities of each partner with respect to the business but can also provide for certain procedures, which may include among other things, the election of a managing partner, how partnership meetings will be conducted, and how the partnership can be terminated. Many aspects of a partnership, including the rights and duties of the partners are governed by the Partnership Act, but the Act is not comprehensive. You may wish to enter into a Partnership Agreement to deal with aspects of the partnership that are not covered under the Partnership Act or to opt out of the Act and establish your own set of terms that will govern your partnership.

Although it is not mandatory to have a written partnership agreement, there are benefits to having one in place, including being assured that you and your partner are fully aware of your respective rights and duties with respect to the business, which in turn may help avoid future disputes.

50/50 Partnership Agreement

If you and your business partner would like to equally share responsibilities for the business, you may choose to structure your agreement as a 50/50 partnership agreement. Under a 50/50 partnership agreement each partner shares equally in any profit or loss generated by the business, regardless of whether you have equally contributed to the business. Under these agreements, each partner also has equal decision-making power.  A 50/50 partnership is not your only option however. You could for example, decide on a division that reflects your individual contributions to the business.

How to Write a Business Contract Between Two Parties

As explained above, a partnership agreement can cover a host of issues. Further, it can be tailored and customized to fit your specific needs. Before drafting an agreement, some issues that you may want to consider include:

  • the name of the partnership;
  • specific contributions by each partner to the partnership;
  • each partner’s authority to bind the partnership to debt or contracts;
  • specific duties of each partner;
  • the liability and indemnification of each partner;
  • how to resolve disputes; and
  • how decisions get made.

If you are unsure how to answer any of these questions, or if you are wondering how to legally sell your business, you may want to consult with a lawyer. MJ O’Nions will draft your Partnership Agreement for a low flat fee and provide you with the information and advice you need to confidently execute an Agreement that you and your partner understand and can rely on throughout your business dealings. Please contact us at 604-449-7779 for assistance.

What are the benefits of incorporation?

/ Mark-John

To a person living in the 19th century, an apple could have meant only one thing, the fruit. To Sir Isaac Newton, an apple meant the Universal Law of Gravitation. To us, or at least to me, an apple could mean the fruit or the new IPhone. As everyone knows, Apple is a company manufacturing consumer electronics, such as smart phones, computers, and tablets. Also, Apple is an incorporated company. Although I do think Apple’s success is due in large part to its hard working employees and Steve Jobs, I wonder if the form of organization Apple has adopted allowed Apple to be so successful. Then, you may ask: “what is an incorporated company?” You may also ask: “what are the benefits of incorporation?” In today’s article, I will attempt to answer these questions. However, be warned, I am not Steve Jobs. Continue reading →

Forms of Business in British Columbia

/ Mark-John

You may have heard your friend or family member saying that they are carrying on business as a sole proprietor or as a partner. You may also know a friend or family member who is a shareholder of a company or you may be a shareholder yourself. However, what does it mean to be a sole proprietor, a partner or a shareholder? What are the differences? Most of all, why does it matter? In today’s article, we will answer those questions.

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What You Need to Know About the Proceeds of Crime (Money Laundering) and Terrorist Financing Act

/ Mark-John

On May 26, 2014 we gave a free lecture at the People’s Law School in Vancouver on What You Need to Know About the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It was well attended with financial services professionals, accountants and interested members of the general public. For those who were unable to attend, this article will give you a brief overview of the lecture on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
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