SHOW ME THE MONEY!!!! Many people will remember this catch phrase line from Tom Cruise’s blockbuster movie, “Jerry Maguire.” Raising money for your business is critical for all entrepreneurs. In this column, the Shark will discuss the different methods to raise capital for your business. Equity Financing An equity raise simply means that a business owner sells shares (voting shares in most cases) in his or her Company to third party purchasers in exchange for cash. The first step in the process is to obtain a fair market valuation of the Company’s business and assets. Secondly, how much capital is required for the business and for what purposes (ongoing operations, sales, general and administrative purposes or for the purposes of acquiring a competitor)? Third, how much control is the entrepreneur prepared to give up in their business. Many decisions in a business can be made with majority shareholder approval (51%). Other significant decisions require a special...

READER QUESTION: What Are The Benefits Of Incorporating My Business? Legal Shark’s Response | This is a common question posed to the Shark.  Many small business owners operate their businesses as sole proprietorships in which they and their businesses are one in the same.  This may work for a few folks but the better approach is to incorporate your business.  The top four benefits of incorporating your business are limited legal liability, advantageous tax treatment, building a corporate brand, and perpetual existence. By limited legal liability, the Shark is referring to personal asset protection.  Corporations allow owners (shareholders) to separate and protect their personal assets from their corporate or business assets.  This is critical protection for any business owner, large or small.  By conducting business through their company, the shareholders are risking the Company's assets only not their personal assets such as homes, cars, boats, cash in bank accounts, personal...

Can companies publish employee photos on the company website without an employee's prior consent? Legal Shark's Response | In today's social media world, scores of employees may already have their pictures posted on the Internet on Facebook, Instagram or LinkedIn. Many employees would not object to having their pictures posted on a company website but employers cannot make this assumption. Some folks may be "camera shy" or have more serious concerns regarding their privacy and the ability of others to locate them online. Privacy legislation requires an employer to seek consent prior to posting photos of employees online. More specifically, provincial privacy legislation in the form of the Personal Information Protection Act along with federal legislation exists which restricts and regulates the collection, use, disclosure, storage and security of personal information. Any photos identifying an employee would be considered "personal information" which employers are prevented from using or disclosing without...

Image Source Facebook, LinkedIn, Twitter and other forms of social media can become an addiction for many individuals including entrepreneurs and business owners. Many folks post numerous daily updates of their thoughts and activities. Privacy is becoming a diminishing commodity these days as society encourages people to use social media as a business marketing tool, mental therapy, as a replacement for real friends, or for pure entertainment. Did you know that your competitors and adversaries could use this information against you? Social media pages are not immune from the rules regarding pre-trial discovery.  Facebook pages are being treated as personal journals and diaries in many personal injury lawsuits.  Lawyers for insurance companies such as I.C.B.C. routinely review the activities of personal injury plaintiffs to verify if their daily activities are consistent with the injuries that they are alleging as a result of a M.V.A. If the plaintiff is claiming serious...

Image Source “Show Me the Money!”  “Show Me the Money!!”   This became a very popular sound bite from the 1996 movie, Jerry Maguire. Chances are it will not likely be your opening statement during employment contract negotiations. What types of employment contracts are there and which one is best for you and your business? Oral or Verbal Contracts People often forget that an employment contract can exist even in the absence of a written document. A verbal or oral agreement contains the terms and conditions relating to an employment relationship between the parties based on their conduct and history. Implied terms developed from the common law or judge made law apply to the relationship such as an employee’s duty of confidentiality and reasonable notice of termination or pay in lieu thereof. The danger with this approach is that without a written document evidencing the agreed upon terms and conditions, disputes...

Image Source Metta World Peace. Chad Ochocinco. Stone Cold Steve Austin. The Rock. Legal name changes and registered trademarks. Is this legal trickery or a legitimate attempt at building and preserving a brand? Did you know that Freddie Mercury of Queen was born “Farrokh Bulsara” and he changed his name to conceal his Parsi heritage? Steven Tyler of Aerosmith changed his name from Stephen Tallarico to increase his promotional appeal as did Charlie Sheen. Charlie Sheen was born “Carlos Irwin Estevez.” Kal Penn from the popular movie, “Harold and Kumar” also changed his name from “Kalpen Modi” for career purposes. Many celebrities and corporations own their names, business logos, symbols and particular sounds. Everything from Julia Roberts' name, the Nike "swoosh," and the NBC chimes have been trademarked. Morgan Freeman trademarked his name in 2005 after a company by the name of Mighty LLC used his name to divert traffic...

Image Source The recent arrival of Uber Nation in Canada has stirred up significant controversy and debate. Uber has launched its UberX service in several cities such as Toronto, Montreal, Ottawa and Edmonton in recent months despite protests from local governments, regulators and the taxi industry. Uber operated its black-car service in Vancouver for about 6 months in 2012 but the company withdrew from B.C. after the provincial transportation regulator imposed a minimum fare of $75 per trip. Uber is an app based transportation network and taxi company headquartered in San Francisco, California which employs a smartphone application to receive ride requests and then sends these trip requests to their drivers. Customers use the app to request rides and track their reserved vehicle’s location. All the drivers and vehicles are privately owned. As of December, 2014, the service was available in 53 countries and more than 200 cities worldwide. What’s...

Recent changes to Canada’s copyright laws have created a major buzz. These changes are the largest overhaul of copyright legislation in a long time. Starting this year, Canadians can expect to receive warning notices if they are suspected of downloading copyright protected materials from the Internet. Legislative changes that came into effect last week require Internet service providers (“ISPs”) to distribute notices of alleged copyright infringement. In the past, this was a voluntary activity. ISPs must retain records of the notices they receive and forward these notices to users for at least 6 months in case a copyright owner decides to pursue legal action. This has resulted in scores of worried consumers who fear they are going to lose access to their favourite TV shows, face fines or even lose their Internet hook-up. Are the rumours true? Will consumers need to change how and what they watch on TVs, tablets,...

Image Source Workplace safety is a critical business and legal issue for all entrepreneurs. Bill C-45 is federal Legislation that amended the Canadian Criminal Code and became law over a decade ago. Chances are you’ve never heard of it. The Bill was enacted after 26 miners died of methane Gas explosion at the Westray coal mine in Nova Scotia in 1992. The accident occurred after the company failed to address safety concerns brought to its attention by government inspectors, Union officials and employees. The local police and provincial government were unable to secure criminal convictions against the Westray coal mine or any of its managers. A Royal Commission of Inquiry made 74 recommendations, which eventually led to legislative action in the form of Bill C-45. Remember that ignorance of the law is no excuse! Education and implementing proactive strategies are essential. Bill C-45 established new legal duties for workplace health...

Image Source December can be filled with holiday cheer. However, for some office or home party hosts an unplanned trip to the courtroom can result. Hosting a party is serious business. It’s not just about party favours and menu planning. Recent surveys reveal that nearly 25% of adults are unaware that a party host who serves alcohol to a drunk guest may be legally responsible if that person goes on to injure or kill someone in a MVA. Holiday office parties can pose significant legal risks. It is not uncommon for adults to have experienced or observed sexual advances between people who work together at office Xmas parties whether they occur after hours or on weekends. An office party can be a venue of a sexual harassment incident just as much as in the office. Although many people view an office holiday party as a fun, carefree, let loose type...

Image Source. Technology is a wonderful invention that allows us to leverage our time exponentially. However with every new technological advancement come new problems. One such problem is spam. What is spam? Wikipedia defines “spam” as a canned pork meat product and references the 1980’s song of the same name by Weird Al Yankovic. For our purposes, spam can be defined as unsolicited, undesired or illegal electronic communication. Canada recently launched anti-Spam Legislation (“CASL”) that has introduced new regimes governing the sending of commercial electronic messages and the installation of computer programs. The anti-spam provisions came into effect on July 1, 2014, and additional provisions regarding the installation of computer programs will come into effect on January 15, 2015. Canada is late to the party on this issue. Other nations such as the U.S., the U.K. and Australia introduced legislation to combat spam years ago. Here are some key highlights...

In a recent precedent-setting decision released by the Supreme Court of Canada, the Court recognized a new duty, the duty of “honest performance” in contractual obligations. Pursuant to this new duty, "parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of a contract.” Essentially, the Court is recognizing that failure to disclose a material fact will violate the positive duty of honest performance. Active dishonesty continues to be offside. The Court also recognized for the first time that there is a "general organizing principle" of good faith contractual performance. Pursuant to this principle, parties generally must perform their contractual duties honestly and reasonably. The Court was careful to note that this principle must be applied in a manner that is consistent with the common law of contracts, including the freedom of parties to act in their own self-interest. This new duty of...

In the business world, contracts are as commonplace as iPads. Parties to a contract can agree to whatever they like. Contracts are designed to document a meeting of the minds of the parties and to memorialize their intent. Rights, duties and obligations are set out in detail. If the agreed upon rights and obligations are infringed due to non-performance or inadequate performance by a party, then a breach of contract may arise. This is exactly when many entrepreneurs experience an emotional meltdown and start asking “Now what?!” Depending on the individual circumstances, the contract may be rendered null and void and a party could demand specific performance or monetary damages. This often leads to lawyers sending demand letters to the breaching party (otherwise known as a “legal nasty gram”). For most civil claims, limitation periods exist stipulating specific timelines to initiate a lawsuit. In B.C., recent changes to the Limitations...

Who’s the boss? Who’s in charge? These are common questions that arise in the corporate governance context for small and medium size businesses. Let’s begin with a working definition of corporate governance. In broad terms, corporate governance refers to the mechanisms, processes and relations by which corporations are controlled and directed. The law treats corporations as persons with separate legal personality which can sue and be sued. The corporation is distinct from the individuals who own it (shareholders) and survives the death of its investors as shares can typically be transferred. Governance structures identify the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors, managers, shareholders, creditors, auditors, regulators, and other stakeholders) and includes the rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations' objectives are set and pursued in the context of the...

We live in a competitive world. In fact, one of the cornerstones of a free market economy is competition. With competition comes risk to all entrepreneurs. That risk involves the failure to protect business goodwill due to weak restrictive covenants. Although most legal agreements contain some form of restrictive covenants, in many cases they do not go far enough in protecting an entrepreneur who has invested years of blood, sweat and tears in building a top-notch business. Simply put, restrictive covenants are contractual clauses that prohibit a party from doing certain acts for a certain period of time within a certain geographical area. Restrictive covenants typically involve provisions relating to non-competition and non-solicitation of employees. Obviously, such restrictions have to be reasonable otherwise they will not be enforceable. In an employment context, the interests of both parties must be carefully balanced in order to have an enforceable covenant. On the...