Question 1

+ What Is a Corporation?

Accepted Answer

A corporation is a legal entity which has its own legal personality that is separate from its owners and people who operate its affairs and business. Corporations are formed of shareholders, directors, and officers. Corporations have the rights and privileges that a natural person enjoys such as entering binding contracts, owning property or borrowing money. Related Blog Post: What is the right structure for my business?

Question 2

+ What Is the Difference Between Shareholder and A Director?

Accepted Answer

Shareholders are those who hold company shares. Voting rights in a corporation are attached to these shares. Shareholders have control over the corporation however they do not directly manage the corporation. They exercise their power of control by making major corporate decisions. Shareholders elect directors to run the company with their best interest in mind. A director’s role is focused on the day-to-day operation of the business such as signing business contracts.

Question 3

+ Do I Need a Lawyer to Incorporate My Business?

Accepted Answer

If you already started searching for the answer to this question on the internet, you might have seen information on the 2-step process of incorporating and many online platforms that would incorporate your business for very low fees. However, most online companies or platforms usually help you with step 1 of incorporating your business. While the first step only includes Articles of Incorporation and their filing and issuance with the Ministry, step 2 is only done by lawyers. Without step 2, your business is not considered incorporated and risks dissolution. Contact us if you need more info and a Toronto Business Lawyer.

Question 4

+ Why Is It A Good Idea To Get Contracts In Writing?

Accepted Answer

Having a contract in writing gives each party the opportunity to fully understand their rights and obligations under the contract. As a party to the contract, you can also identify any issues or ambiguities in the contract with assistance from a business lawyer. In most cases, it provides a mutual understanding and interpretation of the terms of a legally binding relationship.

Question 5

+ What Are the Elements That Each Contract Should Include?

Accepted Answer

For an agreement or contract to be legally binding, there are certain essential elements that must be present in all contracts. These are capacity, offer, acceptance, consideration, mutual agreement, and legality.

Question 6

+ Do I Need a Lawyer to Get My Contract Drafted or Reviewed?

Accepted Answer

Even though it is not mandatory, it has many advantages in understanding your rights and obligations outlined in a legally binding contract. Many people use online sources to draft and generate business agreements without fully understanding the terms and conditions. Most of these contracts include generic clauses and boilerplate clauses that might risk your business massive liability if you are not familiar with the legalese. A Toronto Business Lawyer can help you fully understand your rights and obligations under a contract or draft one that suits your business needs.

Question 7

+ What Is the Difference Between Asset Purchase and Share Purchase?

Accepted Answer

There are two main ways of buying or selling a business: an asset purchase or a share purchase. The key difference between the two is what is being bought and sold. In an asset purchase, the buyer purchases specific assets or parts of the business, such as inventory, equipment, customer lists, and goodwill. In a share purchase, the buyer purchases the ownership interest in the business.

Question 8

+ Do I Need a Lawyer for Commercial Financing?

Accepted Answer

Before signing loan documentation, many major financial institutions and lenders will typically demand that you seek independent legal advice. The loan will typically necessitate several General Security Agreements (GSA), personal guarantees, and Personal Property and Security Act (PPSA) registrations against your personal or business assets.

Question 9

+ What is a Personal Guarantee on a Business Loan or Commercial Lease?

Accepted Answer

Most small business loan lenders require a personal guarantee to be signed by the borrower. A personal guarantee is an undertaking by a borrower to repay a business loan using their personal assets if the business defaults. A personal guarantee is also required in certain commercial lease transactions by landlords, which means this could imply that the individual's personal assets could be taken over if the business fails to generate sufficient revenue to cover the lease payment.

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