Written by Andrea Henry
I can’t believe we’re in the second quarter of 2017 already! We start the year with such good intentions and then…life happens. It’s never too late though, to begin again. Among your brilliant marketing initiatives and hiring strategies, make time to implement these 5 things and save yourself money, time and worry in what’s left of 2017.
Get it in Writing.
If you do nothing else, resolve to get EVERYTHING in writing. Seriously. You will save yourself so much time, money and grief if you make sure that your agreements are set out in writing. Taking the steps to put the agreement in writing will help clarify what both parties expect, ensure that you both are on the same page and help avoid some of the more obvious disputes. Plus, should a dispute arise, written contracts will make asserting or defending your position in court that much easier. To paraphrase my mother, an ounce of prevention is worth a pound of cure and thousands of dollars worth of legal fees and business losses.
Know who you are doing business with.
Who are you dealing with- a sole proprietor, a corporation or a partnership? Has the person on the other side of the contract ever gone bankrupt or had a judgment made against them? The best contract in the world will provide little comfort if the other party is a corporation with no assets or an individual with a history of failing to meet his or her obligations.
Pay close attention to your taxes.
In response to increasing media attention to and public outcry over perceived high levels of tax avoidance and evasion, the Government of Canada has dedicated an additional $444.4 million to the Canada Revenue Agency (CRA) over the next 5 years. The number of auditors will continue to increase as will the number and scope of audits. While much of the enhanced scrutiny will focus on large corporations involved in aggressive and offshore tax planning, we tax lawyers have seen an increase in audits across the board.
It is crucial, now more than ever, to keep excellent records and ensure that there is a clear and dominant business reason for decisions which result in you paying less tax than would otherwise be the case. If, despite your best efforts, you are audited, do not do your best impression of an ostrich. Ignoring correspondence from CRA or simply waiting on them to get back to your after a Notice of Objection has been filed may make you feel better in the short term but will lead to increased interest and penalties in the future.
Protect your data.
Prepare a will.
Business owners whose family depend on the income generated from the business do their families a huge disservice if they have no will in place to determine how their share of the business will be dealt with on their passing. This is particularly important if you have a business partner who will likely wish to carry on the business but may not have the resources to “buy out” your estate.
A lawyer can help you prepare a will which specifically addresses the concerns peculiar to business owners such as whether the business ought to be sold or carried on, what happens to the intellectual property in the business and even what happens to social media accounts on your passing.
Andrea Henry is an Elite+ Mompreneur member, and a partner of Vox Law LLP. Andrea has significant experience advising businesses at all stages of their existence, from start-up to exit, with a focus on tax efficient business structuring. She is also a passionate advocate for businesses and individuals who have been audited and/or reasssesed by the Canadian Revenue Agency at the Tax Court and Federal Court.