Corporate Law

Q: How do I know if I need a corporate lawyer?

A: Whenever you start a business, you should always look to consult with a lawyer. It’s important to always remember things will never go the way you intend, so it’s important to try to minimize as many problems as you can before they begin.

Q: Why is it important for me to document official actions and keep business records?

A: It is the company’s responsibility to produce and maintain records that prove otherwise. Our law firm could offer such record office service and conduct annual report service to keep the company in a good standard.

Q: I run a small business and don’t really have shareholders other than myself and my family. Do I have to hold a minute book?

A: This is always recommended. Even though your business may be a small corporation, it is always a good idea to make sure that your “corporate books” are always clean and organized.

Q: Do I have to maintain a Minute Book for my company?

A: Although keeping up-to-date and accurate corporate records is probably not at the top of the to-do lists of small business owners, not being methodical about corporate record-keeping can cause major headaches in a variety of situations, including:

• Hiring an accountant to prepare tax returns? They will require your Minute Book to prepare your financial statements.

• Before agreeing to loan money, a bank might request to see the Minute Book to confirm the company structure. If you don’t have one, you will have no ability to secure funding for loans or investments.

• Want to pay yourself dividends? The CRA will ask to inspect your Minute Book and if it’s not up to date, it’s likely that the CRA will consider that those dividends income, and you pay tax on them.

• Loaned money to the corporation? The CRA will ask to see the Minute Book. If it doesn’t show the loan made and repaid, the company will not be able to deduct it as an expense, and you are most likely going to be taxed and penalized.

• Buying a company car? The government office may want to see the Minute Book before agreeing to put the car in the company’s name.

• If the company is ever audited, the government will ask to see the Minute Book and if you don’t have one, you will encounter major delays as well as government penalties

• Want to sell your company in the future? The buyer’s lawyer will probably ask to see a copy of the Minute Book.

• If a business associate leaves the company with way more capital than he brought in and there’s no Minute Book with meetings and approvals being documented properly? You will not be able to prove the shady activity.

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Q: Can I just use a template I found on the internet for the business contract?

A: Business Agreements govern very specific relationships between very specific parties and online templates rarely hold up when they’re tested. Some common issues are contracts that are written, contracts that were drafted years ago, and contracts specific to a certain industry. Your business is and finding a template that perfectly aligns with your needs is next to impossible. Having an experienced lawyer draft a proper agreement from the outset can save you thousands of dollars down the road.

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