Considerations of a Will-Maker in appointing a Guardian for children

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Planning for what happens when you die can be very stressful. In addition to planning for how you would like your property, possessions, and assets distributed, if you have minor children, you will also want to consider appointing a successor Guardian. A Guardian of a child is responsible for making parenting decisions, including making important decisions such as where the child will go to school, healthcare decisions, and overall ensuring to act in the best interests of the child.

It is important to consider appointing a successor Guardian if you have minor children. Generally, the biological parents of a child are the Guardians. A Step-parent of the child is not a Guardian of that child unless they have been appointed by a Court Order. If one Guardian parent dies without appointing a Guardian in their Will, the other Guardian parent will become the sole Guardian of the child. If a sole Guardian of a child dies without appointing a successor Guardian, the Public Guardian and Trustee will become the child’s property guardian, and the Director under the Child, Family, and Community Service Act becomes the child’s personal guardian.

Anyone else who wants to be the child’s Guardian will need to apply to the Court for an Order, which can be a stressful and time-consuming process. If a child’s remaining living parent is not a Guardian of the child when the Guardian parent dies, the non-guardian parent does not automatically become a Guardian of the child. They would need to apply to the Court for an Order to appoint them as a Guardian.

When choosing who you want to appoint as a successor Guardian for your child in your Will, the only relevant consideration is the best interest of the child. The person you choose will become your child’s legal Guardian when you die. It is important to take the decision of who to appoint seriously, as they will take on all of your parenting responsibilities and will be responsible for your child’s well-being. There are many things you should consider when making this important choice.

You may wish to consider things such as

  • the person’s relationship with the child,
  • whether they would be able to afford to look after the child, and
  • if they would be able to meet the needs of the child.

Other factors may include

  • religion (the child’s and the proposed Guardian’s),
  • the child’s cultural heritage,
  • whether the child would need to leave their school or community,
  • whether the proposed Guardian has other children and
  • any other factors that you consider important.

When determining the best interests of a child, every case is different. Often family members are appointed successor guardians.

Choosing who to appoint as a successor guardian for your children can be an overwhelming process, especially if you have a complex family dynamic. For help in creating a Will and appointing a Guardian for your children, contact Heath Law

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Considerations of a Will-Maker in appointing an Executor

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Are you in the process of creating a will and have questions about appointing an Executor?

When deciding who you will choose to be the Executor of your Will, there are various factors you may wish to consider.

These factors include:

  • the potential Executor’s willingness to act,
  • whether you trust them,
  • whether they are familiar with you, and
  • whether they have the time and the ability to carry out the duties of an Executor.

A good approach is to ask your potential Executor if they would be willing to take on the task.

Because your Executor will be responsible for carrying out the instructions in your Will and dealing with your assets and debts, it is best to choose someone you trust. If they are familiar with your situation, it will likely be easier to deal with your Estate. Your Executor must be able to handle the work that comes with handling an Estate, which includes

  • locating property,
  • applying for probate,
  • distributing assets and gifts to beneficiaries, and
  • filing your Estate’s tax return to name a few.

Most people appoint a family member or a close friend, however, you may also appoint a lawyer, a notary public, or a private trust company. You can appoint more than one Executor, in which case they will have to act together. You will want to consider if the person or people you wish to appoint as Executor will put the interests of the Estate first and if they will have the capacity to take on the task.

You should also consider if the person you wish to appoint is likely to outlive you and ensure to name an alternate Executor in case the person you have chosen is unable or unwilling to act. If you have concerns about a potential Executor acting in their own self-interest, you may wish to hire an impartial third party to be your Executor or co-executor (such as a lawyer or notary public). You will also want to consider how your Executor will be compensated. If your Executor is also one of your beneficiaries who is getting a gift under the Will, they will not be able to claim additional compensation unless you authorize such compensation in your Will.

Still have questions about your Will? Click here to read more, check out our blog article about Appointing a Guardian for children, or contact us.

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Contrasting and Comparing Salary Arbitration in Professional Sport: Major League Baseball vs. National Hockey League

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Introduction

Salary arbitration ensures fair compensation for players and promotes negotiations between teams and players. Before the arbitration hearing, players and teams have the opportunity to negotiate and reach an agreement on a contract, which may help them avoid the arbitration process. In this blog, we’ll explore the distinct salary arbitration systems used in Major League Baseball (MLB) and the National Hockey League (NHL), shedding light on their differences and the benefits they offer to players and teams.

MLB’s Salary Arbitration

MLB employs the “final-offer” arbitration system to resolve salary disputes between players and their teams. A three-arbitrator panel, handpicked by the MLB Players Association and the MLB Labor Relations Department, is responsible for the arbitration process. The panel considers proposals put forth by both parties in a hearing. During the hearing, the panel weighs several criteria, including the player’s past contributions, career consistency, compensation history, comparative salaries, and the team’s recent performance and public acceptance. After hearing arguments from both sides, the panel chooses either the player’s or the club’s salary figure for the upcoming season.

The final-offer system stimulates negotiations by encouraging each side to present more realistic figures. The arbitrator’s likelihood of choosing the opposing side’s offer motivates compromise, making the more reasonable demand or offer more likely to prevail.

NHL’s Salary Arbitration

In the NHL, both players and teams may elect salary arbitration. The NHL’s salary arbitration system is referred to as conventional arbitration. In this process, negotiators present their offers and arguments to an arbitrator. The arbitrator then makes a final decision, which could either align with one of the offers presented or fall outside of those proposals.

The hearing is presided over by a neutral arbitrator chosen from a group of eight members, all affiliated with the National Academy of Arbitrators. Each side, represented by the NHL Players’ Association (NHLPA)/player and the NHL team, is allotted ninety minutes to present their case, including counter-arguments and comparisons of players from the opposing party. They present their offers by using statistical criteria to identify contracts similar to the player’s and justify where the player stands in relation to those contracts. The arbitrator’s ability to exercise flexibility in salary selection fosters fair and reasonable resolutions, ensuring a well-balanced approach to determining salaries.

 

Conclusion

In conclusion, salary arbitration is an essential mechanism in MLB and the NHL to settle contract disputes between players and teams. The primary distinction between the systems lies in how arbitrators handle the offers. In MLB, the arbitrators must choose one of the two presented offers, while in the NHL’s system, they have the flexibility to select a salary figure not proposed by either side. These arbitration processes actively encourage negotiations, making them vital tools for ensuring equitable compensation and maintaining the competitiveness of both leagues.

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Purchase of a Business – The Importance of Employee Considerations

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Introduction

During the sale of a business, it is essential for both the seller and the purchaser to carefully examine the potential employment issues that may arise. Evaluating these matters during the due diligence process is crucial because hidden employment liabilities, which are often not apparent on the balance sheet, can significantly impact the financial viability of the transaction.

Employment Matters in Share Purchase Transactions

In a share purchase transaction, the purchaser –  by acquiring the vendor’s shares of the company – steps into the vendor’s shoes when it comes to employment issues. This means that existing employment agreements between the employees and the employer remain unaffected, and their terms and conditions continue unchanged. Maintaining employment continuity is of utmost importance in these transactions, and employers can simply inform employees about the share transaction after the closing date.

Employment Matters in Asset Purchase Transactions

In an asset purchase, the purchaser is not automatically obliged to take on the vendor’s employees. Unlike in share transactions, at common law, the sale often results in a termination of employment with the vendor company. Vendors should be aware that the sale of assets does not provide the employer with cause for discharge, reasonable notice, or severance pay. Consequently, the vendor remains liable for such claims, subject to an employee’s duty to mitigate damages or the purchaser agreeing to rehire.

Employment Standards Act of British Columbia

Purchasers must be mindful of section 97 of the Employment Standards Act (“ESA”), which stipulates that if a buyer continues the employment of the employees without any interruption, the buyer will assume the role of the employer and be required to take on all obligations and liabilities. Additionally, section 97 of the ESA states that if the purchaser employs a former employee of the vendor, the benefits contingent on the employee’s length of service, such as vacation, notice of termination, pay in lieu of termination, and severance pay, carry over to the employee’s employment with the purchaser. Consequently, the ESA presumes the purchaser to be liable for the employee’s full length of service with both the vendor and purchaser.

Given the potential liabilities associated with employee terminations, purchasers and vendors often engage in extensive negotiations. To minimize liability, vendors typically prefer the purchaser to hire their entire workforce on the same terms and conditions, rather than selectively retaining specific employees. If the purchaser chooses not to retain all of the vendor’s employees, both parties will negotiate to allocate liability for termination costs.

 

Conclusion

In conclusion, employment matters are critical aspects of business sales that demand thorough consideration from both the seller and the purchaser. Addressing these issues during the due diligence process helps identify potential liabilities and minimizes risks for both parties involved in the transaction. By carefully evaluating employment-related aspects, a smoother and more successful business sale can be achieved.

If you are in the process of initiating a purchase or sale of a business, contact Heath Law by PHONE: 250-753-2202 or send us an email.

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Conditions Precedent – What is it?

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Conditions Precedent – What is it and what does it mean?

In real estate or commercial purchase contracts, “Conditions Precedent” are specific conditions or requirements that must be fulfilled or satisfied by either the buyer or the seller (and in some cases both) before the contract becomes legally binding and enforceable.

These conditions act as prerequisites or contingencies that protect the interests of both the buyer and the seller and ensure that certain key elements are in place before the transaction can proceed.

The fulfillment or waiver of the condition precedents, or subject clauses, is normally referred to as “subject removal.” A common example of a condition precedent is: “the Buyer’s obligation to complete the purchase of the Property is subject to the Buyer being satisfied with the results of a physical inspection of the Property on or before [month, day, year].”

Conditions Precedent may vary depending on the specifics of the contract, but common examples include:

Financing: This condition requires the buyer to secure financing or a mortgage for the purchase of the property before the contract is finalized. If the buyer fails to obtain the necessary financing within the specified timeframe, the contract may be terminated without any penalties.

Inspection/Site Investigation: This condition allows the buyer to conduct a property inspection of the land, building or equipment by a qualified professional to determine whether the condition or state of the asset being acquired is satisfactory. If significant issues are found during the inspection, the buyer may request repairs, negotiate the purchase price, or even withdraw from the contract if the seller refuses to address the concerns.

Title Investigation: This condition involves a title search to ensure the property’s title is clear of any liens, charges, encumbrances, or legal disputes. The sale can only proceed if the title is free and marketable or if contractual language is included to address the discharge of any financial charges or encumbrances.

Zoning/Bylaws: The contract may include conditions that require the seller to obtain any necessary zoning approvals, building approvals or permits or other local government approvals for the property.

Third-Party Consents or Approvals: In some cases, the contract may stipulate that the purchase is contingent on obtaining consents or approvals from third parties, such as government authorities or regulatory bodies. Another example is where a business is occupying leased space and the consent of the landlord is required to a change in tenant. A further example is where a franchise is being purchased and the consent of the franchise system to a transfer of the franchise is required.

Have Questions about real-life uses of Conditions Precedent? 

Purchase of a Business – What Are Usual Or Typical Conditions Precedent That a Purchaser Would Want in an Asset Purchase Agreement

What Are Usual or Typical Conditions Precedent That a Purchaser Would Want in a Share Purchase Agreement

Key Differences Between an Asset Purchase and a Share Purchase in Business Acquisitions

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Securing Employee Matters

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Key employees are vital to a business’s success, and purchasers may include a condition precedent related to negotiating arrangements with these employees. This ensures that essential staff members are retained and motivated during the transition.

 

Compliance with Applicable Laws and Regulations: Purchasers need confidence that the target business is in compliance with all applicable laws, regulations, and licenses. This condition is essential to avoid potential legal and financial repercussions in the future.

 

Obtaining Third-Party Consents: If the transaction involves a change of ownership or assignment of contracts, purchasers may need to obtain consent from third parties involved in those agreements. This condition ensures that third-party relationships are maintained smoothly.

 

Material Adverse Change: To safeguard their investment, purchasers often include a condition precedent to confirm that there have been no material adverse changes in the assets or the target business since the negotiations began. This protects them from unforeseen risks that could negatively impact the acquisition.

 

Securing Necessary Financing: If external financing is required to fund the acquisition, purchasers may make the agreement contingent on obtaining the necessary financing commitments. This ensures that the purchaser has the financial resources necessary to complete the transaction successfully.

Every well-run business has one or more staff members that played a crucial role in helping your business thrive. Securing these employees can make or break the successful sale or purchase of a business so don’t overlook the employees when acquiring or selling a business venture. For assistance in evaluating and ensuring these key employees are included in your business transaction, contact Heath Law, located in Nanaimo, BC.

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Purchase of a Business – What Are Usual Or Typical Conditions Precedent That a Purchaser Would Want in an Asset Purchase Agreement

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Introduction:

Before completing an asset purchase agreement, prudent purchasers include conditions precedent to ensure certain essential requirements are met. These safeguards protect their interests, mitigate risks, and pave the way for a successful acquisition. In this blog post, we’ll explore the typical conditions precedent that purchasers seek to assert in an asset purchase agreement to make well-informed and secure investment decisions.

Reviewing Contractual Obligations: An important condition precedent involves the review of material contracts related to the target business. Purchasers want to ensure that all contracts have been disclosed and that there are no existing breaches or defaults that could impact the acquisition.

Due Diligence: Another key condition precedent is conducting thorough due diligence. This involves an in-depth assessment of the asset. In the case of real estate, due diligence could include an appraisal, geotechnical engineering reports and an environmental assessment.  In the case of equipment, the purchaser may want an evaluation completed to determine its operating condition.

Obtaining Consents and Approvals: To ensure a smooth transition, purchasers want confirmation that the seller has obtained all necessary consents, approvals, and permits required for the transfer of assets and ongoing business operations. This includes approvals from regulatory bodies and third-party stakeholders.

Clear Title and Ownership: Purchasers seek assurance that the assets being sold have clear title, free from any encumbrances or disputes.

If you’re not sure if all of your obligations and rights have been met or are fair and legal during the course of purchasing or selling a business or commercial property contact Heath Law on Vancouver Island.

Want to know more?

What Are Usual or Typical Conditions Precedent That a Purchaser Would Want in a Share Purchase Agreement

Key Differences Between an Asset Purchase and a Share Purchase in Business Acquisitions

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What are the usual adjustments in the purchase or sale of a home in Nanaimo?

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In British Columbia, certain adjustments need to be considered to ensure a fair distribution of costs between the Buyer and the Seller. Adjustments are typically based on the Buyer and Seller’s ownership of the property throughout the year. There are many potential adjustments that may be required in a transaction. However, in this article, we will explore the typical adjustments involved in the purchase or sale of a home in British Columbia.

  1. Property Taxes: Property taxes are payable once in a calendar year. The Seller pays taxes up to the closing date, while the Buyer assumes responsibility thereafter. Often the precise amount of taxes is not known at the time of the adjustment calculation, so a 5% increase from the previous year’s taxes is used. However, upon receipt of the tax bill, the amount may have to be readjusted.
  2. Strata Fees: For transactions involving strata properties, the strata fees are adjusted. The Seller pays the fees up to the closing date, and the Buyer takes over from then on. If a Special Levy has been issued prior to closing, it is usually the Seller’s obligation to pay it in full.
  3. Utilities: Utilities, such as electricity, gas, sewer, garbage collection, and water, are often adjusted. The Seller is responsible for paying the utility costs up to the closing date, while the Buyer takes over the expenses from the closing date onward.
  4. Deposits: Any deposit made by the Buyer is credited to the Buyer on the Buyer’s statement of adjustments.
  5. Rent and Security Deposit: If the transaction involves a rental property, an adjustment for rent may be needed unless the adjustment date falls on the same day that rent is payable. The Security Deposit is usually credited to the Buyer as it becomes an obligation owed by the Buyer to the tenant.

Are you purchasing or selling a home in Nanaimo and have a question? Contact us to ensure that all of your obligations and rights are covered.

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Vendor Financing in Business Sales: Security/Collateral and Key Considerations for Sellers

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What is Vendor Financing?

 

Vendor financing is a financing option where the seller of a business provides financial assistance to the buyer to help them complete the purchase. Many business sales involve vendor financing for at least a portion of the purchase price.

 

Why do Sellers Offer Vendor Financing?

 

Vendor financing offers several advantages to both buyers and sellers. Firstly, it attracts a larger number of potential buyers who may have difficulty obtaining traditional bank loans, thereby expanding the pool of interested parties. Secondly, it can lead to faster deal closures, streamlining the sales process and reducing the time it takes to finalize the transaction. Finally, seller financing can enable sellers to negotiate a higher selling price by providing an attractive incentive to the buyer, making the business or property more appealing. These benefits make vendor financing an attractive option for those looking to buy or sell a business or property.

 

Security and Collateral for the Seller

 

Security agreements for personal property: These grant the seller a security interest in specific assets owned by the purchaser. The security agreement may be general, offering broader protection covering the present and future assets of the purchaser.

 

Personal guarantees: Obtained from the principals of the Purchaser, making them personally liable for the repayment obligations of the Purchaser.

 

Mortgages over real estate: The Purchaser grants a mortgage to the Seller on the property being acquired.

 

Share escrows: Act as security for the unpaid purchase price, the seller retains physical control of the shares of the Company being purchased and if the Purchaser defaults on their repayment obligations the Seller regains control of the Company.

 

Assignments of life insurance: The seller may require the buyer to assign a life insurance policy to them as collateral. This ensures that, in the event of the buyer’s death, the seller will receive the policy’s proceeds to cover any outstanding debt or obligations.

 

Main Considerations of Vendor Financing

 

The length of the term and the interest rate applicable to the vendor financing are crucial aspects negotiated between the parties. Risk and return play a significant role, as the seller gains potential buyers and a higher chance of selling the property or business, but also faces the risk of non-payment or default. Flexibility is a key advantage of vendor financing, providing buyers with more accessible down payment options and flexible repayment schedules. Proper due diligence is necessary to assess the financial health of the property or business and ensure the viability of the financing arrangement. Additionally, legal documentation, including promissory notes, security agreements, guarantees and mortgages, is vital to safeguard both parties interests and facilitate a smooth transaction. Lastly, the tax implications of vendor financing must be carefully evaluated with the assistance of tax advisors to understand the potential tax consequences for both the buyer and seller.

 

 

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Purchase of a Business – What Are Usual or Typical Conditions Precedent That a Purchaser Would Want in a Share Purchase Agreement

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Introduction

Acquiring shares in a company is a momentous decision that demands careful consideration and protection of the buyer’s interests. Within a share purchase agreement, conditions precedent play a pivotal role in safeguarding the purchaser’s investment. In this blog post, we’ll explore the vital conditions that purchasers typically seek in a share purchase agreement to ensure a seamless and secure acquisition process.

Key Conditions Precedent

Due Diligence: This comprehensive examination assesses the target company’s financial, legal, operational, and regulatory aspects, uncovering potential risks and liabilities. This would include a review of financial statements and tax returns.

Consents and Waivers: Assurance that all required consents, approvals, and waivers from third parties, such as lenders or business partners, are obtained, facilitating a seamless transfer of ownership.

Material Adverse Change: Buyers require confirmation that no significant adverse changes have occurred in the target company since the initial negotiations began, protecting them from unexpected challenges.

Litigation Assessment: Verifying the absence of pending lawsuits or legal disputes is crucial to gauge the company’s overall stability and reputation.

Employee Matters: Addressing employee-related issues, such as agreements, benefits, and severance obligations, ensures a smooth transition and fosters employee goodwill.

Clear Title to Shares: Purchasers must verify that the seller has clear and marketable title to the shares, free from any encumbrances or claims.

Financing Arrangements: If external financing is required, purchasers may include conditions to obtain necessary financing commitments, securing the funds for the acquisition.

Tax Compliance: Ensuring the target company is up-to-date on tax matters and has no outstanding liabilities safeguards the purchaser from future tax burdens. A holdback may be required to offset the risk of unpaid tax.

Corporate Governance: Compliance with corporate documents, bylaws, and constitutional requirements establishes a stable foundation for the acquisition.

Intellectual Property Rights: Confirming the ownership or proper licensing of essential intellectual property assets is crucial to maintaining business continuity.

Asset Investigations: whether the land, equipment and inventory owned by the target company are in a certain state or condition and are clear of any charges, liens or encumbrances.

Not what you’re looking for?  Read What Are Usual Or Typical Conditions Precedent That a Purchaser Would Want in an Asset Purchase Agreement? 

Or Key Differences Between an Asset Purchase and a Share Purchase in Business Acquisitions

 

 

 

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