Welcome to Nixon Wenger LLP

Business Law

Business Law

Nixon Wenger LLP has a long history of providing legal services to the business community.  We have numerous clients for whom we have provided initial startup advice, assisted with obtaining loans, guided through litigation, advised on employment issues, assisted with the purchase of another business and advised on succession planning.

Our clients range from sole proprietors carrying on small businesses, to banks, to land developers to large multi-national corporations.  Nixon Wenger LLP acts for every size and type of business locally and throughout the province.

Business Law Services

Nixon Wenger’s litigators have appeared at every level of court in British Columbia, as well as the Supreme Court of Canada.  We represent clients in all matters of disputes ranging from simple debt enforcement to complex commercial litigation.

Our litigators are aware that pursuing litigation can be costly, time-consuming, and stressful.  If warranted, our lawyers will pursue alternative dispute resolution including mediation and arbitration.  However, in certain circumstances, matters do need to proceed to trial and our lawyers will rigorously pursue this course of action on our client’s behalf.

Our business clients range from sole proprietorships through to multi-national corporations and we know that each has their own particular business needs.  We advise clients on the purchase and sale of assets and shares, corporate re-organizations, amalgamations and the formation of partnerships and joint ventures.  In doing so, we recognize that no two transactions are the same and that every transaction requires our careful attention to detail to ensure that you obtain your intended outcome.

We review and prepare commercial leases for landlords and tenants, including shopping mall premises, ground leases, office building space, industrial land and retail space.  The experience within our solicitors group is shared among our team so that our lawyers can benefit from the knowledge of each other.

We additionally review and draft contracts of all kinds for our clients, including sales contracts, equipment leases, distributorship contracts, services contracts, licensing agreements, franchise agreements and manufacturing agreements.

Employment law involves the employment relationship between companies and non-union employees.  Most non-union employment contracts are unwritten, but they are contracts, nevertheless.  Although the law which governs employee contracts is found in statutes such as the Employment Standards Act, their interpretation and enforcement is left largely to the courts.

Our lawyers represent employers or employees in wrongful dismissal actions, application of provincial and federal workplace statutes, advice on the main obligations or terms of non-union employment relationships, drafting advice on written contracts of non-solicitation and non-competition clauses, and golden parachute compensation plans and arbitration clauses.

Nixon Wenger LLP can assist you in setting up and organizing all manner of business entities, including incorporations, partnerships and joint ventures.

We work with you and your other professional advisors to ensure that the business entity is properly created.  This includes the drafting of appropriate shareholders’ agreements, partnership agreements or joint venture agreements, as well as ensuring that the special rights and restrictions attached to each class of shares is in accordance with your plan.

We also assist clients with corporate reorganizations, which will often include a rollover of assets or shares as well as the creation of trusts.

Nixon Wenger LLP acts for both lenders and borrowers. Often, a loan is issued in conjunction with a business transaction, but may also be a refinancing or a general loan facility, such as a line of credit.

We act for a number of private lenders and are happy to advise on the appropriate security for a loan, as well as drafting and registering the appropriate documents.  When acting for institutional lenders such as banks, we work with you to implement your requirements.

When acting for borrowers, we can assist with negotiating certain loan terms, as well as advising on the suitability of the security that has been requested.

If it should be required, we are happy to work with lawyers from other provinces in order to accommodate inter-provincial borrowing or lending, including drafting and registering jurisdiction appropriate security.

Nixon Wenger LLP works with creditors to assist them in realizing loans and enforcing security.  We act for clients in a wide range of matters including enforcement of residential mortgages through to complex multi-lender realization proceedings.  Our lawyers will review your loan documents, security, evaluate your priority and assist you with developing a strategy for collecting the debt owed to you.

Our lawyers have experience in debt collection at all levels of court, as well as in enforcing security.  We are pleased to work with lawyers in other jurisdictions in order to prepare a overall strategy, should the debtor or the debtor’s assets be located in multiple jurisdictions.

Get in touch with our Business Law Team

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Our Business Law Team

Business Transactions FAQ

There are many factors that go into making this decision.  One important consideration is the previous history of the corporation.  When you are purchasing shares of a corporation you may also be purchasing the liabilities of the corporation (whether or not known at the time of purchase).  With an asset purchase you are purchasing a defined list of assets and you not only have a greater ability to select what you are choosing, you have greater certainty regarding any liability that you may be assuming.  On the other hand, a seller may be motivated to sell shares at a lower price than the equivalent assets if they are able to take advantage of the qualifying Canadian small business capital gains exemptions.  We are always happy to talk to you about your options.

The primary purpose of a confidentiality agreement in the context of a sale of a business is to prevent someone from gaining confidential information about your business (without actually purchasing your business) and using it to their own advantage.  Matters of particular concern may include the disclosure of financial statements, unregistered intellectual property, client lists, supplier pricing and profit margins.  If you are concerned about the disclosure of information we recommend that you enter into a confidentiality agreement prior to disclosing it.

We recommend that your corporation’s contracts be carefully reviewed to determine the answer.  Many contracts have a provision which deem a share sale to be an assignment of the contract.  In such a case it is common that the other party to the contract must consent to the share sale.

In most cases, that is not enough time.  Remember that in addition to matters such as the purchase price, you and the seller will also need to come to an agreement on what will actually be purchased, how to value inventory, how to allocate the purchase price to the various categories of goods, which employees you wish to continue to hire, what indemnities are appropriate in the transaction and whether there should be a non-competition or a non-solicitation agreement.  The purchaser may need to secure financing, conduct due diligence (including the review of contracts, financial statements and potential liabilities), and prepare to take over the business.  The seller will typically need time to notify suppliers, gain consents for the assignment of material contracts, organize information for the purchaser to review and to ensure that the representations and warranties that the seller will make in the agreement are true and complete.  Both parties may wish to seek accounting advice.  In other words, there is a lot of work for both the purchaser and the seller and it will take some time to complete.

The purpose of a non-competition agreement is to prevent a seller from immediately opening a similar business nearby for a defined period of time.  “Nearby” has different meanings to different businesses, and is a point of negotiation.  This prevents the business that you have just purchased from being devalued as the seller may otherwise retain all of its previous clients. In some businesses this is a significant concern and in others it is not as important and we would be happy to discuss this with you.

The future is difficult to predict and issues with your business or your location may arise.  Often in a lease not only is the corporation liable but the principals of the corporation are guarantors of the lease obligations.  This means that you may remain personally liable for the obligations under the lease for the entire term of the lease, notwithstanding that your business may no longer be in operation.  Also, should you decide to sell your business after six years, your purchaser may not want to assume the remaining nine years of your lease.  Provided that your landlord is amenable to this, you may wish to enter into a five year lease with two five year options to renew the lease.  Typically, this will mean that your rent will be revisited at each five year period (which may not be the case with a 15 year lease term), but it does provide you with more flexibility and a way to reduce liability while keeping your premises for the long term.

In some circumstances it is possible to negotiate a term of the lease whereby the landlord agrees not to lease premises in the same complex to a competing business.  A landlord does not always agree to such a request, but it is certainly worth considering.

In British Columbia, a verbal agreement can be binding except in certain instances, such as the purchase and sale of real estate. While it is often preferable to have a written contract so that there is greater certainty as to the terms, a verbal contract can be enforceable.

Incorporations, Partnerships and Joint Venture FAQ

There are often two primary reasons for incorporating a business.  The first is to realize tax advantages and the second is to provide a shelter from liability.  Each of these reasons alone can be sufficiently compelling to incorporate and we would recommend that you receive both accounting and legal advice prior to, and in association with, incorporating.

The success rate for partnerships is not high.  Entering into a business with a friend is a decision that should be carefully and objectively thought through.  Some of your considerations include whether your skills and personalities are complementary and compatible, whether you are content to introduce another decision-maker into your business, whether you are satisfied with the terms of a sale, the resulting ownership interests, the division of work and the proposed split of the profits and whether this is a move that will advance your business.

In a closely held corporation with shareholders who are not spouses, we always recommend a shareholders’ agreement.  We view it as an ounce of prevention versus a pound of cure.  If there is a dispute between the shareholders, decision-making within the business can become very difficult and it may be necessary for one or more of the shareholders to leave.  In the absence of a shareholders’ agreement this can be difficult to accomplish and the business may well suffer.

A partnership can be deemed to be formed if two or more parties are carrying on business in common with a view of profit.  It can be easy to enter into a partnership even though you have not explicitly agreed to.  In this type of situation both accounting and legal advice is recommended.

Typically doctors do not want to enter into a partnership because partners become jointly and severally liable for the liabilities of the entire partnership, and not just their own.  In this type of arrangement, a cost sharing agreement may be appropriate where the parties contribute towards common costs (such as photocopiers, office supplies and a receptionist), but are explicitly not entering into a partnership.

Lending and Financing FAQ

A mortgage is a common way of securing money to buy a house. It is a contract that gives a lender some assurance that a borrower will repay the borrowed money. When you secure a mortgage to buy a house, you borrow money from a person or company and you promise to pay back that money, usually with interest and in regular payments. The lender makes sure you will repay the loan with a “charge” against your house. That charge means that if you do not make your mortgage payments, the lender has the right, eventually, to take the property or to sue you for what you owe.

If your equity in the house is not more than what you owe, the lender may take the property. Equity is the amount that your house value exceeds your mortgage loan and any other debts, judgments, or liens registered against your house. This legal action is called foreclosure.

The person who borrows the money is the mortgagor. The person or company lending the money is the mortgagee. The lender may be a bank, a trust company, credit union, or a person, for example, the seller of the house.

The amortization period is the total time it would take to pay off the mortgage if you made regular payments at the same interest rate. Most mortgages for a first home are amortized over 25 years, in order to keep the payments affordable, although this can vary. On the other hand, if you have a 3-year amortization period, the monthly payments are likely to be very high. The shorter the amortization period, the less total interest you pay in the long run.

The term is the time the mortgage lasts. Because interest rates are always changing, most lenders will not lend their money at the same interest rate for as long as the usual amortization period. Instead, lenders first calculate the regular payments as if they were lending the money for the full amortization period at the same interest rate. But then they lend you the money for a shorter time, or term. You can usually choose terms between 6 months and 10 years. Longer terms often have higher interest rates. At the end of the term, you have the pay the remaining amount of the mortgage to the lender. If there are no problems, you can normally do this by just renewing your mortgage for another term, at the current interest rate.

Many mortgages let you do this. It is called a prepayment privilege and there are many types. You may have the right to prepay any amount any time (an open mortgage), or the right to prepay only up to 10% of the mortgage loan each year (a closed mortgage). But if a mortgage does not have a prepayment privilege, many lenders charge a prepayment penalty if you want to fully pay it off before the mortgage term ends. Usually the penalty is 3 months’ interest. This is an extra expense if you want to sell your house before your mortgage term ends. If this is your case, you should try to obtain a prepayment privilege in the mortgage when you receive the mortgage (as you will not be able to add it later on).

If your mortgage lets you prepay, it is good to do so if you can. Anything you prepay to reduce the amount of the mortgage, called the principal, will save you a lot of money in the long run. That is especially true in the first years of the mortgage, when more of each payment goes to pay interest than to pay off the principal.

This means that the seller (or vendor) of the house is willing to lend you some of the purchase price. As security for the loan, you give the seller a mortgage on the property.

An agreement for sale, also called a right to purchase, means that you make a down payment and then make regular monthly payments to the seller. But the seller remains the registered owner of the property until you have paid the full purchase price. You protect your interest in the property by registering a “right to purchase” in the Land Title Office. Sometimes, an agreement for sale may be better than a mortgage, because banks and other mortgage companies have mortgage contracts that are to their advantage. But if you want to use an agreement for sale, you should negotiate the terms very carefully.

Real estate sales, purchases and mortgages are complicated and important transactions and usually are one of the most important financial transactions you will ever engage in. There are also tax issues that you need advice on. Sometimes there are problems with the contract for sale and purchase or other issues that require legal expertise. There are also fraud risks with real estate transactions. The Land Title Office also has very specific requirements about documents that it will accept for registration. For these reasons, you should see a lawyer when buying or selling a house or entering into a mortgage.

In many cases, if you guarantee a loan for someone who borrows money (called the debtor), the lender must first demand payment from the debtor, before going after you, the guarantor. But if you co-sign a loan (sometimes called the covenantor or indemnitor), you are just as responsible to pay the loan back as the debtor is. So the lender can demand payment from you before, or even instead of, demanding payment from the debtor. It is important that you review the guarantee or co-signing documents carefully before signing. These documents are often drafted so that there is little difference between the two.

If your son borrows money from a bank to buy a car and you co-sign his loan, things are fine as long as he makes all his payments on time. But if he can’t make a loan payment, the bank can “garnish” (or take money from) your bank account before you know anything about it.

In this example, if you guarantee the loan instead of co-signing it, you may still have to pay the full amount. But in many cases, the bank has to first demand payment from your son before getting it from you

Commercial Litigation FAQ

Recent changes to the Limitation Act have shortened the time you have to sue before the limitation takes effect and ends your claim. Most claims are now 2 years. Get legal advice early so your rights are protected.

You may have a product liability claim against the manufacturer (and possibly others).  These matters are fact specific and we encourage you to discuss the details with us.

You will need to establish that your brother-in-law did indeed borrow the money from you (and was not a gift) and that the debt is now due.  If this can be done and provided that your brother-in-law does not have any defences then you may receive a judgment against your brother-in-law.  Should you be able to obtain a judgment then you can then take steps to enforce it.

We routinely travel around the province acting for our clients.  We have no issue with representing clients in any part of our province and will travel as the need arises.

Generally our lawyers will seek an early resolution through negotiation, mediation or arbitration, but we may also protect your rights and remedies by starting an action.  Should the matter be settled prior to going to court then the action can be dismissed.  However, if the matter is not resolved we can still proceed to trial.

Loan Realization and Enforcement FAQ

Under the provisions of the Personal Property Security Act (“PPSA”), there are instances where suing on the underlying debt may preclude you from seizing goods in satisfaction of that debt without judgment and vice-versa. The PPSA has specific procedures which a creditor must follow when taking steps to enforce their rights, which can have consequence on the creditor’s ability to collect. It is advisable to obtain legal advice on PPSA related matters before proceeding with enforcement measures.

In most instances, it is possible to register a judgment from another jurisdiction (called a “foreign judgment”) in British Columbia and to then take steps to collect on that judgment. The level of complexity depends upon a number of factors, depending on whether or not the judgment was obtained in a jurisdiction that is recognized by British Columbia’s Court Order Enforcement Act. Even in circumstances where the foreign judgment was obtained in a jurisdiction which is not specifically mentioned in the Court Order Enforcement Act, it may still be possible to enforce that judgment in British Columbia.