Are you looking for a firm to provide comprehensive and accessible business law advice to you?
Pax Law’s lawyers can provide you with legal advice and representation to help your company achieve its goals. If you are planning to reorganize your company, purchase or sell a business or a corporation, or are involved in a business dispute, we can assist you. We have the experience and expertise to help you with whatever legal challenge you are facing.
You’ll have access to our team of legal professionals who will provide clear and concise business law advice tailored to your specific needs. We’re committed to your success, and we’re here to support you every step of the way.
At Pax Law, our commercial and corporate law team can provide comprehensive and accessible advice to a wide range of clients.
Whether you are part of a joint venture, partnership, charitable organization, corporation, start-up, property development team, or are an individual entrepreneur, our team can conduct contract negotiations, and draft the requisite documentation to ensure your continued success.
Some of our business law services include:
- Corporate reorganization
- Purchase and sale of businesses
- Purchase and sale of shares (share purchase agreements)
- Acquisition and disposition of assets
- Corporate borrowing and lending
- Commercial leasing and licensing agreements
Conducting business in this day and age requires well-drafted, enforceable contracts. Every business will be involved in contracts, such as sales contracts, services agreements, franchise agreements, distribution agreements, licensing agreements, manufacturing and supply agreements, employment contracts, commercial lending agreements, lease agreements and purchase and sale agreements of real or capital property. By engaging the services of lawyer who have knowledge and experience in contract law and business law, you protect your rights and reduce the possibility of making expensive mistakes.
Agreements and Contracts
If you are considering signing a contract, or entering into any agreement with another individual, it may be a good idea for you to obtain independent legal advice regarding the agreement. Often, parties enter into agreements without fully understanding the consequences and terms of those agreements, and after suffering financial losses, they realize that early engagement of lawyers and other contract law professionals in drafting the agreement could have saved them time, money, and inconvenience. Pax Law can help you with negotiating and drafting the following agreements:
- Shareholder agreements.
- Partnership agreements.
- Commercial lease agreements.
- Contracts of purchase and sale for businesses, properties, fixtures, and chattel.
Business Purchase and Sale
A Business Purchase Agreement or Sale of Business Agreement is utilized when an individual or corporation purchases assets or shares of a company. It specifies essential terms with respect to the transaction, including price, payment plan, warranties, representations and more. A well-drafted agreement can protect the rights of both sides of the transaction and reduce the chances of the deal falling apart, while an agreement drafted without the experience of contract law experts can lead to significant losses for one or both of the parties.
What is the difference between assets and shares?
Assets are the tangible and intangible property of a business that can be assigned a monetary value, such as client lists, contracts, office furniture, files, inventory, etc.
Shares are portions of ownership in a business that are divided among people and entitle them to profits in the company.
Can assets be excluded from the purchase agreement?
In a purchase agreement, you can choose to leave assets out of the sale. For instance, cash, securities, accounts receivable, and more can be excluded from the contract.
What are the financial arrangements in a Purchase of Business Agreement?
In your payment schedule, you will need to address the following for both the sale of shares and assets:
- Deposit: the amount of money put towards the price of assets or shares paid prior to the Closing Date.
- Closing Date: the day payment is made and assets and/or shares are transferred.
- Payment Options: how the buyer intends to pay the seller, a lump sum, a lump sum plus a Promissory Note for any outstanding amount, or a Promissory Note for the entire amount.
- Possession Date: the date when the inventory is usually counted and the keys are handed over.
How are shares and assets priced?
Shares can be valued according to two methods:
- Aggregate Purchase Price: also known as Aggregate Exercise Price, this is the entire price paid for all the shares.
- Per Share Purchase Price: calculated by assigning a single share price and multiplying it by the total number of shares to equal the total price.
Even if the purchaser is buying all of the assets from a business, each asset should be assigned its own price for tax purposes. Note that some assets may be taxable depending on your jurisdiction.
What are the warranties in a Purchase of Business Agreement?
A warranty is a guarantee made by one party to another. You may choose how long each party is bound by the promises.
Each warranty serves a different purpose:
- Non-Competition: a clause that ensures the seller does not compete with the purchaser for a set time period after the close of the purchase.
- Non-Solicitation: a clause that prevents the seller from hiring former employees away from the buyer.
- Confidentiality Clause: a clause intended to prevent the disclosure of proprietary information to outside parties.
- Statement of Environmental Compliance: a statement that removes liability from a purchaser by declaring the buyer is in no breach of any environmental laws.
If needed, you can include additional warranties within your purchase agreement. Depending on your specific needs, different warranties may be necessary to protect your rights. Consulting with knowledgeable business law professionals, like the team at Pax Law, can help you consider all options available to you and choose the best ones.
Who can review the terms in a Business Purchase Agreement?
The buyer and the seller can confirm their representations (statements of fact) through:
- Officer Certificate: an officer in a corporation or manager of a non-corporate entity
- Legal Opinion: a lawyer who is hired as a third party to review the terms of the purchase What is a “condition precedent”?
The term “Conditions Precedent” means that certain obligations must be met prior to closing the purchase deal. There are standard conditions that both parties must complete before executing the Purchase of Business Agreement, which include confirming representations and warranties, as well as a series of other tasks in advance of the contract’s closing date.
- Business Plan: a document used to outline a plan for a new business including competitor and market analyses, marketing strategies, and financial plans.
- Letter of Intent: a non-binding letter used when parties want to have a written understanding for a future agreement to foster good faith.
- Promissory Note: a document that is similar to a Loan Agreement, but is simpler and often used by family members and friends to document personal loans.
Corporate lawyers in BC charge based on their level of experience, the quality of their work, how busy they are, and where their office is located. Corporate lawyers can charge between $200/hour – $1000/hour. At Pax Law, our corporate lawyers may charge between $300 – $500 per hour.
A business solicitor or a corporate lawyer will ensure that your company or business’s affair are in order and help you with your business law needs such as drafting contracts, purchase or sales of business, negotiations, incorporations, corporate changes, and so on.
Solicitors do not help with court disputes.
A business solicitor or a corporate lawyer will ensure that your company or business’s affair are in order and help you with your business law needs such as drafting contracts, purchases or sales of businesses, negotiations, incorporations, corporate changes, mergers & acquisitions, regulatory compliance, and so on.
The cost of hiring an attorney will depend on the attorney’s level of experience, the quality of their work, how busy they are, and where their office is located. It will also depend on the legal task for which the attorney is being hired.
A solicitor is a lawyer who will deal with out-of-court legal needs of their clients. For example, a solicitor will help with drafting contracts, drafting wills, business purchases and sales, incorporations, mergers and acquisitions, and so on.
In BC, you are not required to have a company lawyer. However, a company lawyer can protect you and your company from risks that you may not be aware of and help you do your business in a more efficient and profitable manner.
You do not need a solicitor to buy a small business. However, it is recommended that you have a lawyer represent you in your business purchase to protect your rights and prevent you from suffering substantial losses as a result of incorrect legal work such as incomplete contracts or poorly structured transactions.
Corporate lawyers usually do not go to court. To protect your rights in court, you will need to retain a “litigator”. Litigators are lawyers who have the knowledge and experience to prepare court documents and represent clients inside a courtroom.
Each company will have different legal needs. You should schedule a consultation with a corporate attorney to see whether you should use the service of a lawyer in your business.