Buying a business in Canada is rarely straightforward. You are likely to face legal challenges arising from corporate ownership, tenant claims, leaseholds, and environmental issues, among many others.
Given the complexity and the huge financial risk involved, always have a corporate lawyer to assist you in the process. So, how will a corporate lawyer help you?
Handling Transaction Details
Your lawyer will help you determine the value of the business you want to buy. He/she will help you draw and file the relevant paperwork such as acquisition and purchase agreements. Your lawyer will do all due diligence to ensure you are buying a legally sound business and will assist with the transfer of licenses and permits.
When you buy a business, you will also be buying the employees or you will be required to lay them off. You need an employment agreement with such employees to ensure trade secrets are protected and to ensure employees do not manipulate you to give them what they want. A corporate lawyer will draft employee agreements to ensure non-disclosure clauses that will protect your business.
A lawyer will understand the needs of your business and will help you prepare the standard form contracts that you need with clients, contractors, suppliers, and customers. He/she will also help you respond to contracts by others that you need to sign.
The structure you adopt can make or break your business. A good lawyer will help you decide such things as the best structure and whether you should have a limited liability company, a sole proprietorship, a partnership, a nonprofit, or a corporation. The structure you adopt affects your exposure to tax obligations, personal liabilities, ongoing expenses, ease of acquiring funds and setup fees and should, therefore, be well thought through by an experienced lawyer.
Leasing commercial space such as retail stores and offices can be very complex and is usually drafted in favor of landlords. A lawyer will negotiate the lease and have a tenant’s addendum with provisions that benefit you.
Licenses and Taxes
Although it is the responsibility of your accountant to prepare and file annual business tax returns, your lawyer has the responsibility to register your business for the relevant tax identification numbers and to understand the tax implications of different business transactions. Your lawyer will also assist you to get all the relevant licenses.
If you are buying a creative-type business such a design or media business, a lawyer will help you register the products and services for trademark and copyright protection.
It is always important to have an exit strategy to protect investors in case the owner dies. Corporate lawyers draft the procedure and costs of such a process.