Many British Columbians are currently at home due to self-isolation, mandatory quarantine or lay offs and in search of projects to pass the time. Believe it or not, there are a number of projects related to your legal affairs that you can tackle from the comfort of your own home. This is one in a series of three articles covering potential at-home projects related to your legal affairs. In this article, we will focus on projects related to businesses.
If you have a company incorporated under the laws of British Columbia:
- The company is required by the Business Corporations Act to maintain certain records. It is prudent to review the company’s records book periodically to ensure that everything is up to date. For example, have there been any changes to directors, officers, shareholders, addresses, etc.? It may also be worthwhile to have a lawyer review the company’s records book in its entirety to determine whether all necessary documentation regarding incorporation, appointments, dividends, transfers, annual reports, etc., as applicable, are included in the company’s records book.
- The company is required by the Business Corporations Act to prepare and file an annual report. In addition to filing the annual report in the prescribed form, the company should also be filing all necessary resolutions in the company’s records book. Please note that if the company fails to file its annual reports it may cease to be “in good standing” and eventually be automatically dissolved.
- The company has until October 1, 2020 to prepare and file the company’s “transparency register”. Please note that this date has been moved from May 1, 2020 to October 1, 2020 as a result of COVID-19. Each company incorporated in British Columbia must create and maintain a transparency register that discloses certain information about “significant individuals” related to the company. For more information, please visit https://www2.gov.bc.ca/gov/content/employment-business/business/bc-companies/bearer-share-certificate-transparency-register/transparency-register or contact our office at (250) 448-2637.
If your business is not currently incorporated (ie. it is a sole proprietorship or partnership), it may be a good time to consider incorporating your business. From a legal perspective, one of the greatest benefits of incorporation is the added protection provided by limited liability. In essence, limited liability means that in most cases, if the company gets sued it is the company’s assets at risk (not your personal assets). It is prudent to consider factors such as potential liability exposure, the availability and coverage of liability insurance, the appropriateness of waivers/releases/disclaimers, tax planning and estate planning, in determining if/when it is advisable to incorporate your business. We recommend consulting a lawyer and accountant to discuss these and other potential considerations prior to incorporating. If you do choose to incorporate your company, we strongly recommend hiring a lawyer to ensure that all of the necessary steps and documents are prepared and that the corporate structure meets all of your goals.
If you are in business with one or more other people, do you have an agreement in place setting out the nature of your relationship and your obligations to one another? If not, now is a great time to consider putting one in place. Depending on the structure of your business, this may be in the form of a partnership agreement, joint venture agreement, shareholders agreement, or a combination of such agreements. These agreements include terms regarding the rights and obligations of each party as well as what happens if the business relationship needs to come to an end (whether caused by incapacity, death, issues between parties, etc.).
If you have employees or independent contractors working for your business, do you have employment or independent contractor agreements in place? These agreements set out, among other things, the nature of the relationship between the business and the employee/contractor, the employee/contractor’s duties, the employee/contractor’s obligations (Ex. confidentiality), and mechanisms for termination. Ideally, these agreements would be in place before the employee/contractor begins work. However, it is never too late if adequate consideration is provided to ensure that the agreement is legally binding and enforceable.
If your business provides a good or service now is a great time to ensure that you have contracts in place setting out the details of the provision of goods and services. The more details and clarity in the contract, the less likely the parties are to end up in a dispute. One clause that is important in times like these is a “force majeure” clause. A force majeure clause provides flexibility if one or more of the parties are unable to fulfil their obligations under the contract due to forces outside of their reasonable control (Ex. COVID-19). We would be happy to review your existing good/service contract or help you prepare a contract to use going forward.
If you have acquired or disposed of an interest in a business since preparing your estate plan, it may be worth reviewing your estate plan. If you do not currently have an estate plan, now is a great time to consider putting one in place. For estate planning considerations, please see our blog “COVID-19 At Home Project Ideas – Wills and Estates” which can be found here: http://touchstonelawgroup.com/kelowna-lawyers/covid-19-home-project-ideas-wills-estates/
We at Touchstone Law Group LLP understand that the COVID-19 pandemic has taken a financial toll on many British Columbians. Accordingly, in many cases we are able to offer payment plans to ensure that no one is prevented from taking steps to ensure that their legal affairs are in order due to financial struggles during this time. For more information about the projects discussed above or our payment plan, please feel free to reach out to one of our knowledgeable and helpful lawyers.
Author: Danielle (Dani) Brito
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of business law at the following: Una Gabie: firstname.lastname@example.org Danielle (Dani) Brito: email@example.com Jane Otterstrom: firstname.lastname@example.org Sasha Platz: email@example.com