Here are some key questions to keep in mind?

Does the buyer have enough experience in the particular field of business?

• The purchaser might benefit from the seller’s assistance to ensure a smooth transition.
• The seller can guide the management of key suppliers and clients during the transition.
• The previous owner can help with retaining key employees.
• Insisting on the lowest possible price might jeopardize a collaborative relationship.
• Alienating the previous owner could potentially also alienate key employees.

What percentage of the purchase price can the buyer commit?

• The purchaser’s available funds will determine the size of the business that can be purchased.
• It may be unrealistic to eye a $25 million business with only $1 million to commit.
• The purchaser’s seed money will also play a role in how much funders will provide.

Can the buyer deal with the debt burden and share control?

• To answer this question, the answers to the previous questions are essential.
• The financing structure will reveal how much money will be available at the buyer’s disposal.
• Contributions by equity investors or financing vendors will determine the level of control sharing.

How does the buyer see the future of the business?

• Any plans to expand or upgrade will affect the structure of the financing.
• Committing all available personal funds to the purchase price will put pursuing visions on hold.
• Including more than the purchase price in the financing arrangement may be essential.

Answering these questions and following the advice of experienced entrepreneurs and legal counsel can lead to successful negotiations in all business acquisitions in Alberta.

Calculating the value of a business is a mathematical exercise carried out by a valuator, based upon one or more of the following:

• Income: This approach bases the value on the business’s projected cash flow, as well as the likelihood of achieving those projections.
• Factors that influence projections: Intellectual property and goodwill could play an essential role in a value based on income.
• Assets: When using this approach, all liabilities of the business – like taxes and debt – are deducted from the business assets, providing the net asset value.
• Market-based: This approach bases the value on the current market, comparing the business with recent business sales involving comparable companies.
• Combined approach: An example of an integrated approach in determining a valuation is using the income-based method in conjunction with the market-based approach.

Reasons that might cause the value and price of a business to differ include a buyer with a different skill set than the seller. Emotions can also play a significant role in determining the theoretical value. A strategic buyer may consider purchasing a business to integrate into existing operations, adding to the theoretical value.

Negotiations between the parties could lead to a price paid in a combination of cash, earn-outs, shares or other structures to serve as a bridge between the price and the business’s value. Buyers of businesses in Alberta can typically expect a difference between value and price. Similarly, the seller must also be prepared to receive a final price that differs from the business’s theoretically calculated value.

Common liability risks

There are many common circumstances that have the potential to lead to a lawsuit.

For example, you may decide to hire caterers for a business function, which resulted in your guests ending up with food poisoning. Although the catering company caused the illness, the guests can seek to hold the company that hosted the function financially responsible as well. Civil lawsuits may follow, even if the victims of food poisoning are staff members of the host. However, the company may, in turn, launch a legal claim against the caterer or the chef who was in charge of food preparation for the function.

Another example is liability surrounding alcohol service. For instance, you may host a holiday party for your employees to thank them for their hard work during the year. If you choose to serve alcohol at the party – without enforcing a drink limit – you could be held responsible for overserving if one of your guests becomes intoxicated at the event and is involved in a collision on the way home.

These are just a couple examples that underscore the importance of seeking preventative legal protections. Business owners can benefit from taking the following precautions:

• Seeking legal counsel when drafting contracts and agreements
• Ensuring that business contracts contain legally enforceable waivers
• Getting clarity with regard to their obligations and legal rights

By anticipating potential liability claims and taking action to prevent them, business owners can protect their bottom lines.

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.

Incorporation is seldom the choice of business structure for new businesses because it is significantly more costly than the other two options. Companies that operate internationally or in multiple provinces choose this structure, as do businesses that sell shares to acquire capital. Corporations’ financial records must be reported to governing authorities annually, and qualified accountants must audit the financial statements.

These are but a few of the essential details and options for choosing the perfect business structure in Alberta that complies with business law. To start a company on the best possible foundation is to consult with an experienced business law lawyer. After assessing the client’s unique circumstances, legal counsel can explain all the options and laws applicable to each business structure. This will allow the prospective business owner to make informed decisions. Furthermore, the lawyer can provide ongoing support and guidance as the business grows.

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.

Methods to protect trade secrets from leaking include establishing confidential or nondisclosure agreements before disclosing any business information. Business owners can also ensure that employment agreements contain confidentiality clauses. Valuable information should be locked up safely, and computerized information must be encrypted and password protected.

Inventors or designers typically find it challenging to launch a new business, commercialize products or seek business partners without revealing some trade secrets. Because of the risk of having trade secrets become general knowledge, many companies in Alberta choose to retain a lawyer’s services with experience in all aspects of business and commercial law. Legal counsel can explain the available legal options and explain what can and cannot be protected by law. For example, trademarks or patents do not cover market research analysis, recipes, and consumer data. An experienced lawyer can assist with establishing methods to protect trade secrets.

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.

Some business owners believe that it would not be in their best interest to report fraud, and they have different reasons. Authorities urge business owners to report all fraud activities to help law enforcement better protect businesses from victimization by fraudsters. The belief that scammers never target the same company more than once is a myth. Employers are advised to use one such an attack to teach employees about fraud prevention because easy targets will remain in the sights of fraudsters.

Being victims of fraud can have devastating consequences on the bottom line of any business in Alberta. Learning to recognize red flags and identify weak spots in the fraud prevention measures will give business owners a better chance to avoid falling victim. The support and guidance of a lawyer with experience in all aspects of business law could be invaluable in prevention. A skilled lawyer can be equally valuable in the corner of business owners who have already been the targets of fraud.

Under Canadian family law, each spouse is entitled to half of the business value, even if only one of them is an owner, or owns shares in it. Disputes may arise when it comes to the valuation of the business. Accepted methods exist for such assessments. However, due to the prevalence of subjective factors, non-owners often challenge the valuation obtained by the owner spouse.

In most cases, both spouses rely on experts to evaluate the business. Nevertheless, even in separate valuations, the methods used and the findings reached could be challenged. Sometimes, such challenges develop into separate disputes in which each valuator defends his or her methods and conclusions. If this dispute ends in a deadlock, the matter will go to court.

All these divorce disputes add to the cost of the divorce, and fighting over whom to hold responsible for the legal fees can create additional concerns. For business owners in Alberta who consider filing for a divorce, it makes sense to be proactive and consult with an experienced business law lawyer even before talking to a divorce lawyer. Having a business law attorney as a part of the legal support team in a high net worth divorce may prove crucial.

Workers must learn about the potential dangers of providing business and private bank details and other information to anyone not connected with the company or anyone who seems suspicious. In many cases, scammers choose to victimize employees by offering lower prices, which are typically only valid for limited periods. They use bullying tactics and the alleged urgency to convince employees to commit to unauthorized, fraudulent transactions.

Business owners can prevent the risks of such losses by limiting the number of employees who have the authority to place orders and issue payments for invoices. Additionally, an approval process can be put in place to ensure that more than one employee will have the opportunity to detect suspicious transactions. In many cases, scammers get information about potential victims online. Websites, networking, social media, and any information available to the public can be used when scam artists target businesses.

Business owners can take several steps to avoid such losses. An Alberta lawyer with experience in business and commercial law can be a significant asset in the corner of any business owner for those who fall victim to scammers and to advise any owner on investing in security systems to protect company assets. Security software is crucial for office networks, mobile devices and computers, and experienced legal counsel can ensure all risky avenues are addressed and protected.

Business owners might not be aware that they may not bar entry to a service animal of a person with a disability, nor may they levy service surcharges for the animal. However, if the business has a policy in place to charge the animal’s owner for any damages it caused, such charges may be assessed. The customer with the service dog must be informed of the existence of such a policy.

Just like any other law, exceptions exist. A man who was refused membership of female-only gym claimed gender discrimination, but the court ruled that the refusal had no adverse effect on his dignity, nor did it cause him any suffering. In another case, a woman accused a barber of gender discrimination after he refused to cut her hair. However, this involved both his and her human rights because the barber’s religion prohibited him from touching women other than those in his family. The court ruled for the barber in that case.

Some business owners in Alberta rely on lawyers who deal with business and commercial law to advise them on establishing policies related to imposing restrictions on customers. Legal counsel for company owners who are accused of violating the human rights of clients can be an invaluable asset. After all, business owners also have rights to protect.

The first two elements are the existence of an offer made by one party and acceptance of the offer by a second party. The party accepting the offer can do so in actions or words. When entering into a contract, one party benefits by means of interest, a right or profit, called a consideration, while the other party experiences loss, forbearance or detriment. Consideration is, for instance, what happens when one party agrees to pay for an object or service provided by the other party.

Both parties to a contract must accept that the contract will become binding as soon as the other party accepts it, and both parties must understand and accept the terms and conditions of the contract. In the event of a subsequent dispute, only the individuals whose names are on the contract may pursue legal action. These are the essential elements, each with its own additional rules, and it is not uncommon for some of a contract’s elements to overlap.

Both consumers and business owners in Alberta who find themselves in a contact-related dispute might have questions about their legal rights to sue. The sensible thing to do in such a situation is to consult with an experienced business and commercial law lawyer. Legal counsel can explain the options and assess the viability of a legal claim. If the client decides to sue, the lawyer can provide invaluable support and guidance while advocating for the client in the ensuing legal proceedings.