Intro to Canadian Business Law
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
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| Covenant | A written agreement or promise usually under seal between two or more parties especially for the performance of some action.
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| Insurable Interest | Something of sufficient worth and benefit that an individual or entity would have reason to insure against its lost. OR A genuine risk of loss may be suffered from damage to the thing insured (not just ownership).
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| Public Domain | Proprietary information of a formerly confidential nature which is now widely knows to the general population.
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| Good Standing |
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| Insider trading | When a person buys or sells shares in a corporation using information available to him as a director or officer of that company but not available to the public.
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| Moral rights |
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| ratification | A written authorization by one member of a corporation allowing another member to vote his/her shared at a general meeting of the company.
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| Incorporation Agreement |
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| Proxy | A figure that can be used to represent the value of something in a calculation.
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| Pre-incorporation contract |
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| Four types of disputes which might arise in union/management situations. How are they resolved? | Jurisdictional, Recognition Interest and Rights
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| Bailment | the transfer of possession, not ownership, of goods from a bailor to bailee on the undertaking that the goods will be returned in as good condition, or better, or disposed of in accordance with the bailor's wishes.
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| Bailment for Value | contractual bailment
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| Gratuitous Bailment | Bailment in the absence of a bargain
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| Law of finders | the finder has better title to the lost article than anyone else in the whole world except the owner.
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| Insurance | a method of shifting risk and spreading risk amongst a number of parties
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| Four aspects of insurance (NADP) | 1. the nature of the risk covered,
2. the amount of the coverage,
3. duration of the protection, and
4. the premium to be paid.
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| Insurance Policy | written evidence of the terms of a contract of insurance
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| Premium | the price paid by the insured for insurance coverage
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| Insured | the person taking out the insurance
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| Insurer | the company or companies providing the insurance
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| Beneficiary | a person, other than the one taking out the policy, who is entitled to the proceeds
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| Rider | a document attached to the front of a policy which evidences the payment of an additional premium for coverage wider than that available under the standard policy
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| Endorsement | A document attached to the front of a policy which evidences an amendment to the policy without having to retype the whole document.
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| insurance agent | an agent or employee of an insurance company
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| insurance broker | an independent business that assesses insurance needs for clients and arranges coverage
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| Insurance Adjuster | a person who is an expert in appraising property losses and whose job it is to pay out the minimum amount possible
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| Personal Insurance | insurance against death, injury and ill-health
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| Property Insurance | Insurance against damage to property
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| Term Insurance | personal insurance for a stated period of time
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| Whole Life Insurance | personal life insurance payable at death
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| Deductible Clause | requires the insured to bear the loss up to a stated amound
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| Fiduciary Relationship | a relationship of the utmost good faith, requiring the parties to act fairly and with legal integrity with each other making full disclosre
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| Insurable Interest | a genuine risk of loss may be suffered from damage to the thing insured (not just ownership)
Kosmopoulus v Constitution Insurance Co
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| Subrogation | when a negligent party causes a loss and the insurer compensates the insured, the insurer is subrogated to the rights of the insured rights of the insured and may sue the negligent party
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| Types of Business Insurance | Business Asset Insurance and Business Operation Insurance
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| Insurance on Business Assets (8) | 1. Fire, Flood and Damage from Natural Elements.
2. Plate Glass Insurance.
3. Commercial Vehicle Insurance.
4. Marine Insurance.
5. Robbery, Burglary and Theft.
6. Fidelity Insurance.
7. Credit Insurance.
8. Aviation Insurance
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| Insurance on Business Operations (1-6) | 1. Public Liability and Property Damage Insurance.
2. Business Interruption Insurance.
3. Key Person Insurance
4. Commercial Liability Insurance
5. Product Insurance (Product Liability Insurance)
6. Professional Liability Insurance
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| Insurance of Business Operations (7-12) | 7. Errors & Omission (Directors & Officers) Insurance
8. Rescue Insurance
9. Event Cancellation Insurance
10. Employee Health Insurance
11. Legal Expenses Insurance
*12. BAILEE INSURNCE
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| Insurance by Operation of Law | 1. Workers Compensation Insurance (Provincial WorkSafeBC)
2. Employment Insurance (Federal EI)
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| Offer & Acceptance: Life Insurance | Acceptance occurs when policy is delivered and first premium is paid.
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| Offer & Acceptance: Property Insurance | Effective immediately whether premium is paid or policy is delivered.
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| Risk Management in Offer & Acceptance in Insurance | Request a "binder" for your property insurance
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| Change in Risk | A change in risk clause requires a material alteration in the subject matter of the risk, not merely an increase in the risk. By deciding to extend the policy term by one month, insurers also waived their right to avoid the policy for non-disclosure.
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| Co-Insurance | If you insure a property for less than it is worth to save on premiums, you become a co-insurer with the insurance company
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| Agency | A relationship where one person, the agent, is authorized to act for another, the principal to bring the principal into contractual relations with a third party.
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| Establishing the agency relationship (signature line) | Peak Performance Pontoons Inc.
“On behalf of”
Per: Benton Counter
Authorized Signatory
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| Express Agency Agreements | powers of attorney and representation agreements
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| Estate Administration | to get your estate in order, five documents may be necessary:
1. Last Will & Testament
2. Power of Attorney - Personal*
3. Power of Attorney - Business*
4. Representation Agreement*
5. Comfort Letter
* Denotes an express agency relationship
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| Employment Law | Judge Made Law - Common Law
Statute Law - Employee Welfare Legislation
Labour Law - Collective Bargaining
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| Contracts of Employment (2) | 1. Term Contract
2. Contract of Indefinite Hire
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| Term Contract | A contract of employment for a stated period of time
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| Contract of Indefinite Hire | A contract of employment for an indeterminate period of time with no expectation of termination or described end date.
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| Independent Contractor | A contract for services but not an employer/employee relationship
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| Characteristics of an Independent Contractor (8) | - hired to complete a service for a fee
- owns his/her own tools
- pays own expenses
- controls his/her own hours of work
- no supervision
- no tax deductions from fee
- invoices for services and charges GST/PST
- assumes risk of profit or loss
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| Notice of Termination: Term Contracts | no notice required; employment ends on last day of the term
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| Notice o Termination: Contract of Indefinite Hire | reasonable notice requires
Employment Standards Act (BC) dictates minimum notice required. Common Law may require more notice than that prescribed by statute (generally applies to management position)
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| Employment Standards Act (BC) dictates minimum notice required. | +12 months = 2 weeks
+ 3 years = 3 weeks
plus one additional week for each additional year to a maximum of 8 weeks.
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| Lazarowicz v Orenda Engines Ltd | may have to take period of previous employment into consideration when determining notice to termination.
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| Wallace v United Grain Growers Ltd | Bad faith conduct in the manner of dismissal is another factor that is properly compensated for by an addition to the notice period
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| Byers v City of Prince George | must look at the prospects of dismissed employee finding work
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| Determining Reasonable Notice (Bardal v The Globe and Mail) | 1. Length of Employment
2. Character of Employment (Management?)
3. Age of Employee
4. Education or Training of Employee
5. Availability of Similar Employmet
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| Pay in Lieu of Notice | payment of an amount equal to the notice period the employee would have received
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| Constructive Dismissal | Is wrongful dismissal and consists of a unilateral change in the terms of employment by the employer
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| Dismissal for Cause | dismissal without notice or further obligation of the employer when the employee's conduct amounts to a breach of contract
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| Reasons for Dismissal for Cause | 1. Misconduct
2. Disobedience
3. Incompetence
4. Illness
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| Misconduct | criminal activity, grossly immoral conduct that brings the employers reputation to ill repute, or breach of an employers code of conduct.
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| Disobedience | Disobedience of a reasonable lawful order
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| Incompetence | there is no difference between a refusal to do a job and an inability to do a job. *Note difference between an illness and a disability - reasonable efforts must be made to accommodate an employee with a disability
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| Risk Management Practice for Employees | 1. Keep employee file
2. periodical employee reviews
3. give clear warnings to non-performers
4. assist employees to better perform
5. have a sign off procedure
Note: Employee Standards Brance
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| Remedies for Wrongful Dismissal | 1. Damages
2. Reinstatement
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| Remedies for Wrongful Leaving | 1. Damages
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| Mitigation | the wronged party must act reasonably in attempting to reduce the damages suffered
Note * adverse economic conditions is not a legitimate reason for dismissing employees without adequate notice
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| Employee Welfare Legislation (5) | 1. Human Rights Act - intended to protect against discrimination (race, sex, age etc)
2. Employment Standards Act - hours of work, OT, min wage termination notice etc.
3. Worksafe BC
4. Personal Information Protection Act
5. Employment Insurance Act
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| Risk Management - HR Management | 1. Assess Employee Needs
2. Establish Job Description
3. Establish Job Specifications
4. Prepare Hiring Advertisement
5. Prepare Application Form
6. Set Standard Interview Questions
7. File on each applicant Interviewed
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| Risk Management - HR Management (cont.) | 8. Check references
9. Criminal record check (only where appropriate)
10. Employment Contract (attach job description)
11. Orientation and training
12. Review Eployee performance (probation period)
13. periodic employee review (sign off procedure)
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| Collective Bargaining | process of establishing the terms of employment between an employer and a union representing a group of employees
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| Certification | acknowledgement by an admin. tribunal that a certain union commands enough membership support to be designated the exclusive bargaining agent for the employees
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| Labour Relations Board (LRB) | an admin tribunal regulating union matters
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| Bargaining Agent | a union which is the exclusive bargaining agent for a group of employees
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| Bargaining Unit | the group of employees represented by a union
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| Grievance | a dispute under a collective agreement
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| Collective Agreement | a contract of employment between a union and management
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| Artibration | dispute resolution by the LRB
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| Four types of Labour Disputes | 1. Jurisdictional Disputes
2. Recognition Disputes
3. Interest Disputes
4. Rights Disputes
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| Jurisdictional Disputes | A dispute between two or more unions over which union has the right to represent a certain bargaining group. Resolved by the certification procedure.
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| Recognized Disputes | When a business refuses to recognize a union's right to represent the businesses employees. Resolved by certification procedure.
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| Interest Disputes | when union and management disagree as to the terms to be included in a collective agreement. Resolved by the collective bargaining procedure set out in the Labour Relations Code
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| Rights Dispute | an employer and the union disagree of the interpretation of the terms of an existing collective agreement or to settle a grievance.
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| Collective Bargaining Procedure (3 steps) | 1. Bargain in good faith for a specific period
2. Each party may request conciliation
3. failing conciliation, management may "lock out" employees or the union may go on "strike" after a "cooling off period"
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| Cooling Off Period | a time period which a strike or lockout may not be called (section 60(3)(iii) - 72 hours.)
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| Wildcat Strike | occurs when a union goes on an illegal strike during the term of an existing collective agreement
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| Essential Service | a unionized occupation which the government deems to be an essential service and may therefore order the employees back to work.
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| Intellectual Property | Intangible property that is the product of mental activity.
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| Types of Intellectual Property (5) | 1. Trade Marks
2. Copyright
3. Patents
4. Industrial Designs
5. Confidential Information*
Note: the deletion of the Integrated Circuit Topography Act and the Plant Breeder's Act.
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| Trade Marks | A mark used by a business person for the purpose of distinguishing his or her wares or services from those of another (it can be a letter, word, name or symbol (logo) or figure).
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| Trade Name | Name that a business uses for trading commercial products and services. it may or may not be a trademark. it is registered provincially and provides little protection against others using the same or similar name.
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| Unregistered Trade Mark | Protection stems from the tort of "passing off" and only protects the business in the local market served.
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| Registered Trade Marks | Provides country wide (plus) protection to the business with the date of first use.
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| Business License example: | Benton Counter dba Peak Performance Pontoons
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| Trade Name Registration (Provincial) example: | Peak Performance Pontoons
Distinctive ^element & ^Descriptive Element
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| Trade Mark Registration (Federal) | Requires similar distinctive and descriptive elements.
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| Marking your product/service: Trade Mark | ® T/M or *
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| Protection Lasts: Unregistered Trade Mark | for as long as you are consistently using the mark in a commercial sense but again only for the market served.
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| Protection Lasts: Registered Trade Mark | for 15 years but may be re-registered for an additional 15 year period prior to the expiration + 15 yrs. + 15 yrs.
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| Copyright | Automatically exists in every original literary, dramatic, musical and artistic work but there are advantages in registering copyright. It provides the artist or assignee with the right to control reproduction, distribution and performance of the work.
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| Marking your work: Copyright | © , Date, Name of Copyright Holder
ie. © 2014 Caroline Fadden
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| Moral Rights* | Moral rights to the integrity of the work protects against the unauthorized alteration of the work
Snow v T.E. Eaton*
Your protection lasts for the life of the author, plus 50 years and it not renewable
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| Patents | Patents grant an inventor a monopoly over a product or process that he or she has created. It requires 'novelty', 'utility' and 'ingenuity'.
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| Protection Lasts: Patents | Your protection lasts for a period of 20 years and may not be renewed
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| Marking your work: Patents | Canada had no law requiring the product be marked. However, the US requires the work 'Patent' followed by the patent number to be displayed on the product and packaging.
*Note - can be marked as "Patent Pending or Pat. Pending" as well.
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| Industrial Designs | Features of shape, configuration, pattern or ornament or a combination of, in a finished article, which features appeal to and are judged solely by the eye.
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| Protection Lasts: Industrial Designs | Your protection lasts for 10 years with no right of renewal.
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| Marking your work: Industrial Designs | There is not law, but you should mark the design with "D" inside a circle and the name of the design owner.
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| Confidential Information | Also commonly referred to by American affectation "Know How" is not protected by a specific statutory enactment, but rather by contract law and fiduciary relationships.
Note: confidential information is not subject to theft in Canada. R v Steward.
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| Examples of Confidential Information: | Non-Disclosure Agreements
Employment Contracts
Fiduciary Relationships
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| Non-Disclosure Agreements | AKA Confidentiality Agreements should be used when any proprietary information is divulged prior to taking steps to protect it.
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| Two Examples of when an NDA may be necessary: | 1. Business Plans should be marked “Confidential”, numbered and coded.
2. If you seek technical advice for the construction of a prototype, the engineer or technician should sign NDAs.
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| Employment Contracts | should include a clause requiring the employees to maintain the confidentiality of information provided to them in the course of their employment until such time that the information falls into the public domain.
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| Employment Contract should also include this clause. | All invention and/or creations of the employee during this course of employment or in his or her off hours belong to the employer, a clause regarding this should be included in the employment contract.
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| Confidential Information: Fiduciary Relationships | managers owe a fiduciary duty to their employers to maintain the confidentiality of proprietary information during and after their employment even if there is no cause in their contracts. Good faith.
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| 3 Forms of Business Organization: | 1. Sole Proprietorship
2. Partnerships; and
3. Corporations
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| Other types of Legal Entites | 4. Societies* (Provincial) and Non-Profit Organizations* (federal) and
5. Cooperatives* (francises cooperated to make TV commercial & buy time i.e. Sylvan Learning Centre).
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| SOLE PROPRIETORSHIPS | Unincorporated Business owned by a single individual who has unlimited liability for the debts and obligations
(Risk Management, FLA - put assets in spouse's name).
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| PARTNERSHIPS | Defined by Section 2 of the Partnership Act as "the relation which subsists between persons carrying on business in common with a view of profit"
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| Partnerships: Advantages | Pooling of wisdom and knowledge
Pooling of financial and physical resources
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| Partnerships: Disadvantages | 1. Joint and Several Liability
2. Need for Group decisions can lead to a loss of valuable time
3. More difficult to change ownership
4. Potential liability after dissolution
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| 3 Types of Partnerships | 1. General Partnerships
2. Limited Partnerships
3. Limited Liability Partnerships
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| Limited Partnerships | there must be at least one general partner and one limited partner.
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| Limited Partnership Advantage | Raising Capital
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| Limited Partnership Disadvantage | Liability - general partners remain liable but limited partners only to the extent of their investments. Note Sec 64 of the BC Partnership Act.
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| Limited Liability Partnerships | Eliminates the issue of joint and several liability as between the partners but the other disadvantages remain.
Note: all jurisdictions other than BC restricts the formation of LLPs to recognized professions. In BC anyone may form an LLP.
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| Joint Venture | A partnership limited to one venture for a limited period of time.
* Contractual Joint Venture
* Equity Joint Venture
Risk Management:
1.Consider a corporate structute
2.FLA
3. Partnership Agreement
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| Corporations | A separate legal entity created by statute and legally separate from its shareholders, directors and officers.
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| Corporations: Advantages | Limited Liability, BCBC Act ss 30 and 87
Separation of ownership and management
Continued existence
No loyalty or duty of good by shareholders
Possible tax advantages.
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| Corporate Veil | A legal euphemism for a barrier of protection between the corporation and its shareholders (and directors and officers).
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| Corporations: Disadvantages (2) | Cost
Inability to flow losses through
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| Lifting the Corporate Veil: 3 Conditions | 1. The individual must control the corporation
2. the control must have been used to commit a fraud, a wrong or a breach of duty; and
3. the misconduct must be the cause of P's injuries.
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| Piercing the Corporate Veil (10) | 1. Pre-incorporation Contracts
2. Family Law Act
3. Fraud
4. Taxation
5. Insider Trading
6. Criminal Negligence
7. Environmental Protection
8. Workers Compensation
9. Competition Act
10. BCBC Act ss. 154 and 158
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| Circumventing the Corporate Veil: | 1. Guarantees
2. Covenants
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| Incorporating in BC | 1. Name reservation
2. Incorporation Agreement
3. Adopt Articles
4. Incorporation Application; and
5. Constituting Documents
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| Corporate Capital | Debt
Bonds
Equity
Shares
Common Shares
Preferred Shares
Authorized Capital
Issued and Paid Up Capital
Shareholders Loans
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| Corporations: Advantages | Limited Liability, BCBC Act ss 30 and 87
Separation of ownership and management
Continued existence
No loyalty or duty of good by shareholders
Possible tax advantages.
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| Corporate Veil | A legal euphemism for a barrier of protection between the corporation and its shareholders (and directors and officers).
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| Corporations: Disadvantages (2) | Cost
Inability to flow losses through
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| Lifting the Corporate Veil: 3 Conditions | 1. The individual must control the corporation
2. the control must have been used to commit a fraud, a wrong or a breach of duty; and
3. the misconduct must be the cause of P's injuries.
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| Piercing the Corporate Veil (10) | 1. Pre-incorporation Contracts
2. Family Law Act
3. Fraud
4. Taxation
5. Insider Trading
6. Criminal Negligence
7. Environmental Protection
8. Workers Compensation
9. Competition Act
10. BCBC Act ss. 154 and 158
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| Circumventing the Corporate Veil: | 1. Guarantees
2. Covenants
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| Incorporating in BC | 1. Name reservation
2. Incorporation Agreement
3. Adopt Articles
4. Incorporation Application; and
5. Constituting Documents
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| Corporate Capital | Debt
Bonds
Equity
Shares
Common Shares
Preferred Shares
Authorized Capital
Issued and Paid Up Capital
Shareholders Loans
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