Good Lawyers want to be legal Advisors Thomas Santram, Vice President Legal Cineplex Entertainment offers Corporate / Real Estate Law advice for small/medium business owners
Posted on 11 May 2011 by admin
Intro
- The legal advice provided by a lawyer is specific to a particular client and to particular circumstances.
- I?m not giving legal advice, but want to leave you with some issues for you to consider further
Choosing a Lawyer
- Be open about lawyer?s fees
- Good lawyers, who are interested in growing their practice, with you as a client, will welcome the opportunity to be specific/clear about fees.
- A good lawyer will not want to bill you as much as possible on one file ? he/she will want to become a trusted legal advisor.
New Issues
- AODA (Accessibility for Ontarians with Disabilities Act)
- Customer Service Standard (in effect)
- Information & Communication Standard
- Employment Standard
- Built Environment Standard
- Transportation Standard
- Act fully comes into effect in 2025 ? but, the proposed standards start coming into effect in 2012 for certain private sector organizations
- The regulations/proposed standards have not yet been finalized ? they are expected to be finalized in 2011.
- Visit the website for the Accessibility Directorate of Ontario to get more information on the status of these regulations.
- Privacy Law
- This is an area of law to which attention must be paid
- If you apply some common sense, this doesn?t have to be a very complicated area of law.
- Be very careful about what you do with customer, supplier and employee information.
- Be very careful not to lose laptops, USB sticks and briefcases.
- Limit what materials/information you remove from the office.
- Ensure that your office?s computer systems are secure and that sensitive information is not easily accessible should your office network be compromised.
Corporate Law
- Different ways to conduct business:
- Sole proprietorship (no separate legal entity);
- Partnership
- separate legal entity, but flow through taxation to partners
- partners are personally liable for acts of partnership
- Corporation
- Separate legal entity to owners, officers, directors and employees
- General principal is that shareholders have no liability beyond the value of their shares
- Officers and directors of a corporation may face personal liability for the actions/inactions of a corporation (i.e. liability for environmental pollution, unpaid CPP and EI premiums etc.)
- Try to keep your personal affairs/finances separate from those of the corporation.
Real Estate Law
- Real Estate law is an ancient area of law which is the basis of many of our modern laws
- 2 options re small business: (i) ownership; and (ii) leasing
-
- OWNERSHIP
- Real estate is a great asset
- As businesses grow, many will be required to use their real estate as security for loans to permit them to grow
- Security for these loans consists of:
- Mortgage security on real estate
- PPSA security in corporate chattels (equipment, furniture, vehicles etc.)
- Assignment of insurance proceeds
- Assignment of shareholder loans
- For mortgage security over family home, spouse will have to agree
- Spouse may also have to agree to be a guarantor ? this imports greater security than family home
- All family property can be put in spouse?s name, but this is also risky if the marriage falls apart
- OWNERSHIP
- Purchasing Land as investment or as place of future growth:
o?? Disclose everything to your lawyer
o?? Zoning: Discuss future plans and initial use
o?? Environmental: You will inherit liability if there is contamination (despite possible right to sue the vendor or contaminator ? remediation may have to be immediate)
o?????????????????????? LEASING
- Commercial Tenancies Act is much less detailed than the Residential Tenancies Act; businesses are viewed as being more sophisticated
- Important to READ the lease documents.? Lawyers will attend to legal issues (not fundamental business terms).
- Things to discuss with Landlord ? all based on the bargaining power of each party:
o?? Rents:
?? Minimum Rent
?? Additional Rent (operating costs)
?? Taxes
?? How will rents increase?
- By CPP?
- By fixed amount?
- By agreement at specified intervals?
o?? Option to Purchase: Triggers Land Transfer Tax ? be very careful
o?? Guarantees versus Indemnities ? try not to give any of these
o?? Exist Strategies:
?? Right to sell business + lease
?? Right to sublet;
?? Right to assign.
?? Very rare for lease obligations not to continue under these circumstances ? negotiate the best deal you can
o?? Exclusivity
?? Is your business such that this is important?
- General office use / warehouse use = No
- Grocery store / Donut store ? Yes
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