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Calgary Real Estate, Wills and Estates, and Business Law Blog

Business law: Which business structure to choose

The prospects of starting a new business in Alberta are exciting. However, proper planning is crucial to the business' success. Choosing between the various business structures is essential because it will affect other decisions, and compliance with business law and tax laws from the onset is vital. It is only natural to have many questions, and approaching the right person for answers is essential. The options are sole proprietorship, partnership and incorporation.

A frequently chosen option is a sole proprietorship because it is easily created and informal. In this structure, legal and tax authorities see the operator and the business as one, which is an advantage in that income gained can be reduced by business losses. However, a sole proprietor is responsible for all business functions and personally liable for business debts. A partnership is not much different from the sole proprietor business structure, although it has two or more partners, typically with a contractual agreement. An agreement typically determines the percentage of each partner's share of tasks, expenses, and revenue income for the day-to-day running and when preparing tax returns.

Wills are powerful documents to express last wishes

Reportedly, a significant percentage of Canadians, including many in Alberta, believe there is no need to do estate planning. Many people reason that it is obvious that their surviving spouses and children will receive their estates. However, that is not the way things work. Wills are the way to ensure that possessions, money and percentages of estates go to the intended beneficiaries. Without wills, the law will decide how the estate assets like real estate, personal items, vehicles, investments and more will be divided.

A will could be a powerful document by which people can express their wishes, often including other than immediate family members. Death can come unexpectedly, and having wills and trusts in place can relieve some of the trauma surviving family members go through after the unexpected deaths of loved ones. A will allows a person to bequest specific items to those who would most appreciate it or show gratitude to someone who deserves it. Another available option is to make charitable bequests.

Does business and commercial law protect trade secrets?

Trade secrets can involve valuable information about a business, and leaking such secrets could be devastating for Alberta businesses. One example is the Coca Cola Company that has protected its soft drink formula for over 100 years. For some businesses, their ongoing success is dependent on the protection of trade secrets. However, business and commercial law in Canada does not offer intellectual property protection.

The only legal way to prevent confidential information falling into the wrong hands is through the registration of a patent. This is a costly process, and many business owners choose to treat valuable information as trade secrets. Others use this method to keep their secrets until they have a registered patent. For the protection of trade secrets, the secret must provide value for the business, and the company must take every possible step to protect the secret.

Workplace discrimination can affect both employers and employees

More workers in Alberta and across Canada are learning about their rights in the workplace. Discrimination based on race, gender, culture, colour, ethnic origin, nationality, age, religion, disability, marital status, sexual orientation or pregnancy is against the law. Furthermore, membership in a trade union or union activities may not be held against employees. Discrimination is a violation of employment and human rights laws.

Typical areas of employment discrimination include staff recruitment and selection for work assignments. Violations could also be present in the benefits, terms and conditions of employment. Moreover, the type of training and who receives it could involve discrimination, as could considerations or selection of personnel for promotion, transfer, dismissal, retrenchment and disciplinary action.

Trusts can simplify wills and estates

When an Alberta resident makes a will, the assets will typically be distributed as per his or her wishes. However, establishing trusts, along with wills and estates, can simplify what is typically a complicated process. A trust will even allow the testator to transfer assets before his or her death.

The difference is that a trust is a separate legal entity that actually owns the assets transferred into it. The trustor can put real estate, bank accounts, mutual fund units, stocks, bonds and private business assets in the trust. A claim to challenge a will can be filed in an Alberta court of law while a trust's terms are significantly more difficult to contest. Furthermore, a trust is not subject to the probate process like a will, which makes the details of the will available for the public.

Employer ordered to pay damages to employee after his termination

Employers in Alberta may feel they have to walk on eggs when it comes to disciplining employees. Sometimes the courts choose the side of employees, causing the impression that employees can get away with egregious behaviour. One case like this involved the termination of an employee who apparently had a problem with alcohol.

Reportedly, after years of working for a company, the employee began staying away from work. He suffered depression, was divorcing his wife and ultimately admitted to having a drinking problem. His employers continued paying his salary through two stints of alcohol rehabilitation periods, but he apparently kept drinking alcohol. The employer says the man reported for duty on only 21 days over a four-month period.

Business law: Separate myths from real fraud threats

Business owners in Alberta have to deal with potential fraud risks along with all of their other efforts to keep afloat. Some are proactive and seek the guidance of a lawyer with experience in dealing with business laws to separate myths and reality when it comes to fraud threats. Reportedly, more than half of all organizations in Canada fell victim to fraudsters in 2017.

One of the myths that make businesses vulnerable is believing that they will quickly spot a scammer, but arming themselves with valuable information about the methods fraudsters use is quite a task. Some say scammers only target large businesses. However, surveys by The Canadian Federation of Independent Business show that one in five small and medium enterprises have been victims of fraud.

How does the law deal with a lost will?

Anyone in Alberta is responsible for the safekeeping of his or her estate planning documents. Furthermore, sharing the information of where the will and other documents can be found after the testator's death is always a good idea. Suppose a man who lives with one of his daughters learns about that daughter's illegal activities and decides to change his will, leaving her nothing. When he dies, the daughter destroys the new will and presents the older version in which her father left most of his assets to her.

In cases where a person who keeps his will and other essential documents in his or her home dies, the first one to reach the deceased person often has access to the papers. If that person realizes presenting the latest will would not be in his or her interest, it should not be difficult to make it disappear. Even if other family members were aware of a new, changed will, if it cannot be found, there is not much they can do about it.

Human rights: The right to reasonable accommodation

The Alberta Human Rights Act requires that employers accommodate employees with special needs and limitations. Examples of employees who might require reasonable accommodation include those with physical or mental disabilities or special needs related to gender or religion. Employers are required to make exceptions or adjustments to work environments, procedures, rules and standards.

Reasonable accommodation is determined by the needs per case, as different employees may have different disabilities. For example, workers in wheelchairs will need different accommodations than employees whose religion requires scheduled breaks at specific times to allow them to pray. Workers with mental or physical disabilities may need adjusted work schedules to accommodate their unique needs.

Keeping your will up to date is crucial

Estate planning may seem daunting, but it is essential for Alberta residents who want their wishes to be followed after their death. Dying without a will leaves all the decisions about the deceased person's estate in the hands of the court, as explained in the Distribution of Intestate Estates in the Wills and Succession Act. However, it does not stop at drafting the will, because life's changes may affect the testator's wishes for the distribution of his or her estate.

If a person dies with an out-of-date will, the court might deem it invalid. Changes in laws and changes in the person's financial circumstances must be reviewed from time to time. Depending on when the initial will was drafted, a marriage, births of children, divorce and other personal matters may need to be updated in an existing will as they happen.

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