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

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.

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.

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.

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.