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Atricle Dump - Creditor Proofing Your Business - Tips fo Canadian Business Owners
If medical billing software companies let the inmates run the asylum, nothing would get done. Total chaos would be the least of your problems. So in order for a medical billing software company to run properly, you need a few department heads to keep the inmates in line. What follows is a review of the key people you will need, why and what they must be able to do.To start off with, you're going to need an overall manager to look over the whole company. The reason
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofin
Accumulating debt is a part of starting and running a venture. Every enterprise has some debt to suppliers, and many owe mortgages for their office or retail space. Maintaining a certain level of business debt can even be healthy for your credit rating, when good-sized payments are regularly made.But what happens when these payments become fewer and farther in between because the business is no longer generating enough income? Do you, as an entrepreneur consider fil
Debtors completing their bankruptcy/ proposal often wish to start up another business sometime in the near future. The expected question then arises: how can they creditor-proof themselves in the event that their new business fails? Here are some ideas:
1. Consider incorporating the business. Incorporation will provide the owner with a level of creditor protection - most of a corporation's obligations are limited to its assets so this structure can provide protection for personal assets. This structure also has income tax benefits, which will not be discussed here, (this subject warrants its own article which will be published at a later date).
2. Always pay statutory debt on time, specifically:
- Payroll source deductions;
- Goods and Services Tax collected;
- Provincial Sale Tax collected; and
- Employee wages and vacation payable.
In Ontario (and in certain other provinces), corporate directors can be personally responsible for these debts, notwithstanding that the business is incorporated.
3. If the owner is using his or her own funds to invest in the company, it's advisable to do so in the form of a loan to the company secured by a charge over the assets. A lawyer should ensure that the proper documents are prepared and that the security interest is properly registered. In the event the company fails, the security interest will have a priority over all unsecured creditors with respect to realizing on the company assets.
If the loan is not properly documented and registered, the owner may become an unsecured creditor waiting in line to be paid with all the other creditors in the event of business failure.
4. Consider acquiring personal assets in a spouse's name or a family trust. Such assets do not form part of the transferor's bankruptcy estate and are therefore not subject to claims of estate creditors.
5. If the company owner is putting away money for retirement, consideration should be given to investing in RRSPs that are exempt from claims; for example, segregated funds. The distinction between segregated funds and mutual funds is that segregated funds are insurance contracts. The Ontario Insurance Act provides that:
"where the beneficiary of the
insurance contract is a spouse, child, grandchild or parent of a person whose life is insured... the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure..."
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofing
Postage meters save money and time on any type of mailing that people need for their business. They can be easily made use of for mail, handouts, or invitations.Postage meters are an excellent way to handle precanceled stamps or sanction imprints, as well as bulk mailing of a business. Individuals can make use of the same postage meter for any of their mail. However a special permit is required in order to be able to use it for bulk mail. Additionally, special markings
2. Always pay statutory debt on time, specifically:
- Payroll source deductions;
- Goods and Services Tax collected;
- Provincial Sale Tax collected; and
- Employee wages and vacation payable.
In Ontario (and in certain other provinces), corporate directors can be personally responsible for these debts, notwithstanding that the business is incorporated.
3. If the owner is using his or her own funds to invest in the company, it's advisable to do so in the form of a loan to the company secured by a charge over the assets. A lawyer should ensure that the proper documents are prepared and that the security interest is properly registered. In the event the company fails, the security interest will have a priority over all unsecured creditors with respect to realizing on the company assets.
If the loan is not properly documented and registered, the owner may become an unsecured creditor waiting in line to be paid with all the other creditors in the event of business failure.
4. Consider acquiring personal assets in a spouse's name or a family trust. Such assets do not form part of the transferor's bankruptcy estate and are therefore not subject to claims of estate creditors.
5. If the company owner is putting away money for retirement, consideration should be given to investing in RRSPs that are exempt from claims; for example, segregated funds. The distinction between segregated funds and mutual funds is that segregated funds are insurance contracts. The Ontario Insurance Act provides that:
"where the beneficiary of the
insurance contract is a spouse, child, grandchild or parent of a person whose life is insured... the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure..."
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofin
Have you ever been to a seminar that was on your favorite topic and came home with pages of notes, all written in scribble scratch, because you were devouring all the speakers’ words and writing notes lightning fast?You loved the stories and powerful illustrations that set your mind on fire with ideas.Remember those break-through moments you experienced when you sat at the bar and bought your favorite Guru or Idol a drink and listened intently as they shared wit
If the loan is not properly documented and registered, the owner may become an unsecured creditor waiting in line to be paid with all the other creditors in the event of business failure.
4. Consider acquiring personal assets in a spouse's name or a family trust. Such assets do not form part of the transferor's bankruptcy estate and are therefore not subject to claims of estate creditors.
5. If the company owner is putting away money for retirement, consideration should be given to investing in RRSPs that are exempt from claims; for example, segregated funds. The distinction between segregated funds and mutual funds is that segregated funds are insurance contracts. The Ontario Insurance Act provides that:
"where the beneficiary of the
insurance contract is a spouse, child, grandchild or parent of a person whose life is insured... the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure..."
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofin
Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.A business plan is something that many small bus
5. If the company owner is putting away money for retirement, consideration should be given to investing in RRSPs that are exempt from claims; for example, segregated funds. The distinction between segregated funds and mutual funds is that segregated funds are insurance contracts. The Ontario Insurance Act provides that:
"where the beneficiary of the
insurance contract is a spouse, child, grandchild or parent of a person whose life is insured... the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure..."
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofin
A couple of weeks ago I attended an event planners Christmas function. The turnout was decent, there was no shortage of skewered prawns or celebratory cocktails and a good amount of effort had gone into the costumes worn by circulating serving staff.A few minutes into it however, I noticed one lady propped on a bar stool, looking tired and unimpressed. An ex-planner, with a career lifetime in the industry, she commented "They always get it wrong with the music at the b
Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.
6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.
Conclusion
With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.
Creditor proofing is best undertaken at the start of a business venture - when there are few assets and no claims outstanding. By the time a claim occurs, it may be too late to move assets beyond the reach of creditors.
Disclaimer
This article is an overview rather than a complete analysis. Before applying any of these suggestions, consult your professional advisor.
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