BC Introduces Franchises Act
BC is set to become the 6th province to regulate the franchise industry. The Franchises Act was introduced in the legislature on October 5. Once adopted, franchisors will be required to provide franchisees with a Franchise Disclosure Document (FDD) at least 14 days before a franchise agreement is signed. BC’s legislation appears to be more business-friendly than in some other provinces. For example, franchisors can require franchisees to sign confidentiality agreements and provide refundable deposits when they receive the FDD. Franchisors who operate in any of the existing regulated provinces will find it easy to comply with the BC Act. BC franchisees will benefit from improved access to information and remedies.
A Simple Solution to Avoid Probate?
“Probate” is a court application to confirm the validity of a Will. It is an increasingly complex process, and requires payment of a probate tax. For many couples, probate can be avoided on the first spouse’s death by joint ownership. Not surprisingly, after the first spouse dies, the family may assume that joint ownership with the children is appropriate to avoid probate. This may or may not be the case.
Subject to certain requirements, private companies can sell shares to friends and family and “accredited investors” without issuing a prospectus or hiring a registered securities dealer. These exemptions have been amended to require that companies take “reasonable steps” to confirm that investors meet the requirements of the exemption. Companies may no longer simply rely on the representations of the investor. In addition, accredited investors must sign a new Risk Acknowledgment Form.
In a unanimous decision, the Supreme Court of Canada ruled that parties to a contract have a duty to act honestly in the performance of their obligations. The Court noted that this “means simply that parties must not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract”. On the other hand, the Court also noted that the duty of honesty “does not impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract; it is a simple requirement not to lie or mislead the other party about one’s contractual performance”.
Executors Proceed Cautiously
We last wrote to you about changes to BC Wills laws. Changes to our laws for processing Estates have also been made. The estate law overhaul doesn’t particularly require any action on your parts. A brief review of our take on today’s handling of estates follows…..
Property Transfer Tax is a provincial tax on the transfer of real estate. It is payable at 1% of the first $200,000 of the fair market value, and 2% on the amount over $200,000. The 2003 provincial budget included changes to the First Time Home Buyers’ Program, which provides a tax exemption from Property Transfer Tax for individuals buying their first home. Buyers who meet the following conditions will be eligible for the exemption.
– must be a Canadian citizen or permanent resident who has:
– lived in BC for one full year prior to the purchase, or
– filed two income tax returns as a BC resident within the last six years.
If the buyer is not a Canadian citizen or permanent resident at closing, but becomes one within one year of closing, the buyer can apply for a refund of the tax.
– must have never owned an interest in a principal residence anywhere in the world at any time.
– must occupy the property as their principal residence within 92 days of the date the property is registered in the buyer’s name, and must continue to reside in the property for the first year of ownership. If the buyer moves out prior to the one year anniversary, some or all of the tax may have to be re-paid
If the property is vacant land, the buyer must build and move into the home within one year of the date the property is registered in the buyer’s name, and must continue to reside in the property for the first year of ownership.
– value must not exceed $475,000. A proportional exemption is available for properties that have a value of up to $25,000 above this threshold (ie. up to $500,000).
– in the case of vacant land, the value of the land plus the total construction costs must not exceed the amounts stated above.
– must be classified as residential. If some of the buildings on the property are not classified as residential, only a partial exemption is available.
– must not exceed 0.5 hectares (1.24 acres) in size. If it does, a partial exemption is available.
If you have any questions about the First Time Home Buyers’ Program, please call us.
Changes May Affect You
This past March, British Columbia implemented major changes to its wills and estates laws. The new Wills Estates and Succession Act (“WESA”) consolidates four older acts, and modernizes the law regarding Wills and the administration of estates for BC residents. These changes may seem, on first blush, to be of little interest. But they are substantial, and we are sending this newsletter to our clients to let you know that we are concerned that some of you may need to update your Wills……
Make the right deal to ensure a secure retirement
Jeffrey owned a business that manufactured electronic navigation components sold around the world. He started the business at the same time that he and his wife Marilyn were starting their family. They had hoped that one or both of their children might be able to take over the business some day, but their children’s own families and careers took them elsewhere…
Is it the right choice for you?
Jane was retiring! To prepare, she attended a retirement seminar and noted she’d need a new Will. She’d heard about Beacon Law’s Estate Planning Navigator program, so she made an appointment to see her lawyer, Lianne. She’d ensured she’d be looked after in her old age, and would provide for her beneficiaries when she passed on, but during the Navigator review, Lianne and Jane noticed one more thing that it would be wise to look into….