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Calgary Corporate Law Blog

Who is buying businesses right now? Who is selling?

Every entrepreneur recognizes that there are risks in buying and selling businesses. These risks are mainly financial, meaning some entrepreneurs can and will take bigger gambles than others do.

But no matter how comfortable you are with taking chances as a buyer or seller, it is still critical to reduce unknown elements and potential consequences you may be facing. Familiarizing yourself with the current transactional landscape is one way to understand and anticipate what you could be getting into.

Does your agreement include a material adverse change clause?

Contracts in business can serve as the backbones of professional relationships. When valid, contracts establish the parties’ roles, responsibilities, and expectations in a legally binding document.

However, changes can occur between the time parties enter into an agreement and completion. Both parties to the contract should, therefore, understand what a material adverse change (MAC) clause is and how to utilize it.

Dos and don’ts of conducting due diligence

If you are planning on buying a business, chances are you have already done a fair amount of research. You probably know the type of business you want, where you want to buy and how much you expect it to cost.

No matter how informed you think you are at this point, the research element of your business aspirations is not complete. There is still more to do when purchasing a business in the form of due diligence. 

Handling transfer price challenges and disputes

Businesses that operate globally may well have a transfer pricing policy in place. These policies serve as an accounting strategy to determine transactional costs across divisions. A transfer pricing policy can also be an effective tax avoidance practice by allocating profits across international parts of the organization.

However, numerous challenges can arise when it comes to these intercompany pricing policies due to their complexity and the potential for illegal or abusive conduct.

4 mistakes to avoid after receiving a letter of intent

Selling a business is complicated and stressful. Business owners can have a lot at stake, and there are many moving parts that affect valuations, price and conditions of the transaction.

At the first sign that a sale could happen, which could be receiving a letter of intent, it can be easy to get anxious and want to push forward as quickly as possible. However, moving too fast is one common mistake people can make at this stage, as are the missteps we examine below.

What you should know about Shareholder Agreements

Shareholder agreements can be powerful tools to safeguard your interests as an owner of a company. In part, it outlines the rights and privileges of various shareholder positions, and the duties and responsibilities of key members of the organization.

If you are the only owner of your business, a shareholder agreement may not be necessary. But once you have multiple stakeholders, it’s crucial that you have a set of rules for how to approach and resolve potential disagreements or conflicts if they arise.

What’s In A (Corporate) Name?

You may have already figured out an idea for a business. You may have already figured out how you will operate your business, secure financing and how it will grow. But what can be difficult for many is picking the name of your business when you incorporate.

There are certain requirements and restrictions that go into naming a corporation. It’s important to make sure that when you do settle on a name, it suits your business and is legally acceptable.

Social Media And Corporations: What You Need To Know

As companies look for ways to expand their reach and attract new customers, the importance of updating social media is becoming more apparent. It’s a great way to cast a wider net to reach more consumers, and to foster greater engagement with their brand.

However, there are some issues that companies should stay clear of when beefing up their online presence. The Government of Canada has posted some helpful tips that business owners and corporations should consider when posting sharable content.

Estate Freezes Reduce Tax Liability And Simplify Estate Planning

Sole owners of corporations who want to minimize their taxes or create make family succession plans for a thriving business should consider implementing an ‘estate freeze’. Owners can use estate freezes to restructure their company’s ownership by limiting the value of the owner’s assets and transferring future growth to the owner’s family. This allows owners to reduce the amount of taxes that they have to pay.

Objectives Of Estate Freezes

Transfer Pricing - Facing CRA Audits As A Multinational Business

In our last post, we looked at the basic concept of transfer pricing. Any business that buys and sells to a foreign entity under its own corporate group may, at some point, be called upon by the CRA to defend the transfer price for those international transactions.

If that price doesn't match up with an amount that unrelated companies would normally agree to - the arm's length price - a transfer price dispute could ignite. Is your business at risk? Is it possible to successfully face the CRA and ward off increased taxation and penalties?


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