Business Matters

Incorporation and Corporate Reorganization
Thomson & Tuer can assist you in your determination, and creation of, the appropriate business vehicle for your enterprise – whether a sole proprietorship, partnership, joint venture or corporation.

If it is the right vehicle for you, corporations are legal entities and are treated as an individual. Corporations are taxed at a lower tax rate than individuals. If you operate a business it may be appropriate to incorporate. One of the benefits of incorporating is limiting the liabilities of the owners. If the business is sued the owners or Shareholders are not generally liable. In certain circumstances the Officers or Directors of a Corporation may be liable for their statutory obligations such as remitting statutory deductions to the government.

Shareholders Agreements
A shareholders’ agreement is an agreement among shareholders that describes how a company should be operated and outlines shareholders’ rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders.

Purchases and Sales
We can support in all aspects of purchase and sale of business enterprises. There are two basic methods to buy or sell a business: an asset purchase or a share purchase. An asset purchase requires the sale of the business’ assets. A share purchase requires the purchase of the shares of a company, effectively transferring the company’s assets and liabilities to the purchaser.

Real Estate

When real estate is sold, whether it is residential real estate or commercial real estate there are a number of documents that need to be prepared including, the Transfer and the Statement of Adjustments. The Transfer is the document whereby title is transferred from the Seller to the Buyer. Except in limited circumstances the lawyer acting for the Seller cannot act for the Buyer. This is a requirement of the Law Society of Upper Canada, the organization which licenses and regulates lawyers. Ontario has established an electronic Land Registration System and in order to register real estate documents you need a lawyer.

Among the documents prepared by the lawyer acting on behalf of the Seller the Statement of Adjustments is critical as it is necessary to determine the amount of money the Buyer has to pay to the Seller at the time of closing. In addition to accounting for the deposit the Statement of Adjustments addresses items such as the sharing of the property tax obligation between the Buyer and the Seller, addressing the issue of fuel oil or propane, the rental of propane tanks or other items. Typically, a Buyer pays for a full tank of fuel oil so a Buyer should determine the anticipated cost of a full tank of fuel when planning the budget for the purchase.

The Buyer’s lawyer has number of responsibilities associated with the purchase of real estate. The Buyer’s lawyer verifies that the documents prepared and provided by the Seller’s lawyer are correct and the lawyer searches the title to ensure that the Buyer is acquiring good title to the property they are buying so that the Buyer does not experience legal difficulties when the property is sold.

A mortgage is a form of security which is granted by the owner of land to a Lender. The land and any buildings located on the land are security for the loan made by the Lender. A mortgage may be for a fixed term at a fixed rate of interest or a variable term and a variable rate of interest or some combination thereof.

A secured Line of Credit is a mortgage although all of the particulars and the amount of the loan may not be known. There will, however, be a cap on the amount that can be borrowed on the Line of Credit. When property is sold the mortgage must be repaid to the Lender. The Lender usually has a discharge fee which needs to be paid to the Lender for the preparation of the mortgage discharge documentation. There may also be a fee paid to the lawyer who prepares the discharge.

Land Transfer Tax
The Buyer of real estate pays a tax to the Ontario government based on the purchase price of the property. The tax is payable no matter how many times the property has been sold. A schedule for the calculation of Land Transfer Tax is set out below.
$0 to $55,000 .005 x purchase price
$55,001 to $250,000 .01 x purchase price minus $275
$250,001 to $400,000 .15 x purchase price minus $1525
over $400,000 .02 x purchase price minus $3525

First time home buyers may have all or part of the Land Transfer Tax waived. The Land Transfer Tax may be waived or reduced depending on the purchase price of the property. For purchases up to $227,500.00 all of the Land Transfer Tax is waived. If the purchase price of the property exceeds $227,500.00 the amount of the Land Transfer Tax in excess of that which would be charged on a purchase of $227,500.00 is payable by the Buyer.

Title Insurance
Title insurance is insurance coverage which protects the legal title to your property. A one time fee is paid at the time of purchase or if after you have purchased a property you put a mortgage on the property you may obtain title insurance to protect the Lender however, the premium is paid once and is valid for as long as you own the property. If it subsequently is determined that there is a title defect the title insurance will respond and the title insurer will undertake the necessary steps to remedy the defect. Title insurance will also protect the Buyer against fraudulent claims.

Because real estate particularly homes are very valuable criminals look to real estate as a source of income. While real estate fraud takes a variety of forms it frequently involves someone pretending to be someone they are not in order to obtain a mortgage. Having obtained the mortgage the fraudster takes the money and disappears often leaving the unsuspecting homeowner (generally these frauds are against homeowners) with a mortgage against their property which the homeowner knows nothing about. The lending institution wants to be repaid the money it has loaned and may want the unsuspecting homeowner’s property sold to satisfy the mortgage. Title insurance can be of assistance in this type of situation. In an effort to address the concerns regarding fraud we will obtain 3 pieces of identification for you. This identification will in all likelihood include any of: a) driver’s license; b) passport; c) naturalization documentation; d) birth certificate; e) credit cards; and f) other government issued identifying documentation other than health cards.

Fees and Disbursements
The legal fees we charge are dependent on the size of the real estate transaction. We will provide you with a quote for the real estate fees and disbursements and Land Transfer Tax if applicable. Disbursements are incurred for items such as tax certificates, municipal work order searches, conservation clearance letters, title searches and the like.

Estates & Trusts

Wills – Individuals
Each person should have a Will. The purpose of a Will is to:

  • Appoint someone to handle the administration of your estate upon your death.
  • Distribute your assets in the manner you wish upon your death.
  • To appoint a guardian to care for your minor children.

For a married couple it is usual for each spouse to give their assets to the surviving spouse and in the event both spouses are deceased transfer their assets to their children. When the children are young it is particularly important to consider the possibility of the entire family being killed in some tragic event, a car accident, for example as consideration as to how you wish to dispose of your assets in that eventuality should also be considered. Where you have married children you may wish to consider whether in the event of the death of one of your children the share of your estate which would have gone to that child should go to that child’s spouse.

Wills – Corporate Shareholders
In the event you are a shareholder in a Canadian private corporation we may avoid an Application for a Certificate of Appointment (probate) by having a separate Will specifically dealing with your interest in the corporation.

Power of Attorney for Property
In the event you are incapacitated prior to your death and someone needs to handle your financial affairs you should have a Power of Attorney for Property. If you do not have a Power of Attorney for Property then the Public Guardian and Trustee has the responsibility of administering your affairs unless someone makes application to the Public Guardian and Trustee for an appointment as the guardian of your property. This process is complicated and expensive and can be avoided by appointing a Power of Attorney for Property. In this way you name the person whom you wish to administer your affairs in the event of your incapacity. Frequently, one or more people are named in the first instance with a provision that an alternate be provided in the event the person named in the first instance is unable or unwilling to act on your behalf.

Power of Attorney for Personal Care
In the event you are incapacitated and unable to make health care decisions the Public Guardian and Trustee will make health care decisions for you or an individual can apply to the Public Guardian and Trustee’s Office to be appointed guardian of the person for you. This process is complicated and expensive and can be avoided by appointing a Power of Attorney for Personal Care. In this way you name the person whom you wish to administer your affairs in the event of your incapacity. Frequently, one or more people are named in the first instance with a provision that an alternate be provided in the event the person named in the first instance is unable or unwilling to act on your behalf.

Estate Planning
Estate Planning is simply taking some steps to prepare for your death and the taxes and other obligations that will arise upon your death. There are steps that can be taken to minimize or defer taxes. In some instances it may be appropriate to establish trusts for children or grandchildren to ensure that they have some income at a later date or in the event of a disabled child or grandchild to provide for them in a manner which will not impede the assistance the government is able to provide.

Family Law

Family Law
We can assist you with every aspect of your family legal needs as those needs change over time.

We can support you in:

  • Negotiating and drafting cohabitation, marriage (prenuptial), separation or parenting agreements.
  • Advice and representation on custody/access for children, spousal support, child support and property division claims whether you are married or common-law.
  • Processing uncontested divorce filings in court on your behalf.

Mediation & Arbitration

Mediation is a process whereby a mediator, an independent third party, seeks to assist the parties to the litigation in reaching a solution without having to go through a trial.

Ross Thomson of Thomson & Tuer is trained as a mediator and has mediated a number of disputes between parties. Thomson & Tuer is prepared to represent clients in a mediation. Mediation can be a cost effective way of resolving disputes between parties. Mediation will succeed when both parties to the dispute are prepared to compromise their positions and want to resolve the dispute.

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. Ross Thomson of Thomson & Tuer is a Certified Arbitrator in Ontario.

Questions about a judicial issue?