Complete trust in your loved one and a certain degree of spontaneity are important ingredients for a healthy long term relationship, but couples can decide to reinforce it with the help of a domestic contract.
What types of Domestic Contracts are there?
Cohabitation Agreements, Marriage Contracts and Separation Agreements are different types of domestic contracts. Couples use them to set out certain terms for their relationship, and to agree on the rights and responsibilities in case the relationship ends.
You and your partner can enter into a Cohabitation Agreement before or after you move in together.
What can a Cohabitation Agreement set out?
A Cohabitation Agreement can set out:
- how you want to organize some things in your relationship (e.g. keeping your finances separate).
- how property will be divided upon breakdown of the relationship;
- who owns property purchased during cohabitation;
- how much support will be paid if relationship ends;
A Cohabitation Agreement cannot set out:
- rules about custody and access for your children, which can only be decided after you and your partner separate.
What if I marry and I signed a Cohabitation Agreement?
If you and your partner get married after you have been living together, your Cohabitation Agreement becomes a Marriage Contract.
A Marriage Contract is a domestic contract for married couples. For couples who are planning to marry it’s known as Prenuptial Agreement (Prenup), while for married couples it’s known as Postnuptial Agreement (Postnup).
What can a Marriage Contract set out?
A Marriage Contract can set out:
- protection of pre-marriage assets and debts incurred by your spouse;
- children’s education and upbringing;
- control over budget and bank accounts;
- support obligations and variations of spousal support;
- pensions and RRSPs;
- equalization and division of property, including the matrimonial home.
! Be cautious when you include your home and property in a Marriage Contract. You could give up rights that you have under the law. It is important to talk to a family law lawyer who can explain your legal rights and options.
A Marriage Contract cannot set out:
- rules about custody and access to children.
- limits to spouses’ rights to live in matrimonial home.
! You and your spouse have equal right to live in your matrimonial home; it doesn’t matter whose name is on the house’s title.
What rights do I have under the law?
According to the law, married spouses who are separating have the right to equally share any increase in the value of their property that builds up during the marriage. The law sets out a calculation to determine what each spouse can legally get, called “equalization.” There are also rules about sharing the value of the matrimonial home, the home where you and your spouse were living as a family at the time of your separation.
You can sign a Separation Agreement to decide on different issues when you and your partner decide to separate. You can execute a Separation Agreement if you were married or if you lived in a common law relationship.
What can a Separation Agreement set out:
- rules about custody and access for children,
- financial support e.g. child support or spousal support, and
- how property will be divided.
Advantages of Negotiated Separation Agreement vs. Court Order Separation Agreement:
- Negotiating a Separation Agreement is cheaper, quicker and less stressful than going to court;
- You and your partner can control what is in your agreement;
- You and your partner may be more likely to follow the negotiated agreement because you decided together its content.
Disadvantages of Negotiated Separation Agreement
- If you are in an abusive or bullying relationship, it can be very difficult to reach a fair result and have respectful negotiations with your ex-partner. In abusive or bullying relationships, it is safer to go to Court for an Order.
- Going to Court to decide these legal issues may also help you protect your legal rights.
Can Domestic Contracts Be Enforced?
You can file your domestic contract with court, and it can be enforced as a court order, including any agreements about child and spousal support payments.
Why do I need to enforce my Domestic Contract?
You should enforce your contract in case there is a problem in the future or your partner stops following the agreement.
Does the court review my contract?
No. Court will not review your contract. Court reviews a contract only if one of the spouses challenges it. Generally, courts enforce domestic contracts.
! You should get legal advice before you execute a domestic contract. You must understand what is included in your contract, how your rights in the contract are different from your rights under the law.
How can I challenge the contract?
If you want to challenge your domestic contract, you have to apply to court.
! Courts do not like to interfere with domestic contracts and will not change a domestic contract just because it gives you less than what would you legally get.
When can I successfully challenge the contract in Court?
Court doesn’t usually change the division of the property in a domestic contract. However, court may change the spousal support sections if your situation is worse than at the time the contract was signed.
There are other cases when the contract can be set aside, but it is advisable to obtain legal advice to understand if your situation would qualify, and what might be the possible outcomes.
At Beffa Law we can help you:
- negotiate and draft cohabitation, marriage (prenuptial or postnuptial), or separation agreements;
- review and enforce pre-existing agreements;
- ensure the agreement is drafted in such way as to be legally binding;
- Independent Legal advice (ILA) for any domestic contracts.
Contact us today to learn how a marriage contract drawn up by experienced family lawyers can help protect your rights and assets upon separation. Call us at (416) 856-7631 to arrange for a confidential initial consultation.
Do you need a lawyer when you start your small business? Contact us to find out how our Beffa Law could benefit your business.
Types of Business Entities
There are 3 main business entities an entrepreneur should consider in Ontario:
A sole proprietorship is the simplest form of business organization, it is easily to set up and it is automatically created as soon as you begin to carry on business in your name. You are the sole owner, and fully responsible for all debts and obligations related to your business. All profits are yours to keep. Because you are personally liable, a creditor can make a claim against your personal assets as well as your business assets in order to satisfy any debts.
- Easy and inexpensive to register
- You have direct control of decision making
- Minimal working capital required for start-up
- You can enter into contracts with other people and entities
- You can hire employees
- Some tax advantages (deducting your losses from your personal income, and a lower tax bracket when profits are low)
- All profits go to you directly
- You are solely responsible for your actions and the actions of any employees you may have.
- You have unlimited liability (if you have business debts, claims can be made against your personal assets to pay them off)
- You cannot bring anyone as a partner & can be difficult to raise capital on your own
- Income is taxable at your personal rate and, if your business is profitable, this could put you in a higher tax bracket
- Lack of continuity for your business if you are unavailable
This is the best type of business organization to start off with. Then, as your business grows, you can decide if alternative business is more suitable.
A partnership is automatically formed when two or more individuals or corporations carry on business together with a view of profit.
The Partnerships Act (Ontario) determines the rights and obligations of each partner, unless the partners enter into a formal partnership agreement. In a partnership, your financial resources are combined with those of your business partners and put into the business. You and your partners would then share in the profits of the business according to the legal agreement you have drawn up. The partners are the sole owners and cannot be employees.
In a General Partnership, each partner is jointly liable for the debts of the partnership. In a Limited Partnership, a person can contribute to the business without being involved in its operations. A Limited Liability Partnership is usually only available to a group of professionals, e.g. lawyers, accountants or doctors.
While all of the benefits of the partnership accrue to the partners, each partner is personally responsible for the obligations undertaken in contracts entered into by the partners. This is important because it establishes the terms of the partnership and can help you avoid disputes later on.
Hiring a lawyer to help you draw up a partnership agreement will save you time and protect your interests.
- Fairly easy and inexpensive to form a partnership
- Start-up costs are shared equally with you and your partner(s)
- Equal share in the management, profits and assets
- Tax advantage — if income from the partnership is low or loses money (you and your partner(s) include your shares of the partnership in your individual tax returns)
- There is no legal difference between you and your business
- Unlimited liability (if you have business debts, personal assets can be used to pay off the debt)
- Can be difficult to find a suitable partner
- Possible development of conflict between you and your partner(s)
- You are held financially responsible for business decisions made by your partner(s)
A corporation has its own legal entity. Incorporation can be done at the federal or provincial/territorial level. To set up a corporation, you have to file articles of incorporation with the government. When you incorporate your business, it is considered to be a legal entity that is separate from its shareholders. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. Further, the corporation is taxed on its own, and you pay tax on what the corporation pays you, by salary or dividends.
It is always wise to seek legal advice before incorporating.
- Separate legal entity
- Owns assets and has the limited liabilities
- Owns property in its own name and ownership is transferable
- Has continuous existence
- May sue on its name and may be sued
- Can be an employer, you can be an employee
- Easier to raise capital than it might be with other business structures
- Possible tax advantage as taxes may be lower for an incorporated business
- A corporation is closely regulated
- More expensive to set up a corporation than other business forms
- Extensive corporate records required, including documentation filed annually with the government
- Possible conflict between shareholders and directors
- You may be required to prove residency or citizenship of directors
Under the provisions of the Comprehensive Economic and Trade Agreement (CETA) (effective as of September 2017), it is easier for citizens of EU member states to obtain work permits in Canada.
Before CETA, a Canadian employer could obtain a work permit for foreign workers coming from EU only by completing a Labour Market Impact Assessment (LMIA), which essential had to prove that the skill-set needed by the employer could not be found in Canada. According to CETA, certain contractual service suppliers and independent professionals can work in Canada without the need to apply for a Labour Market Impact Assessment (LMIA).
Under the accord, applicants in either category may stay in Canada for a cumulative period of no more than 12 months in any 24-month period or for the duration of the contract, whichever is less.
Two general criteria must be met to qualify for a CETA work permit, and are related to applicant status and applicant qualifications:
- Applicant status criteria: applicants in either professional category must be:
- citizens of a European Union member state;
- engaged in the temporary supply of a service for a period not exceeding 12 months; and
- contracted to provide a service in accordance with the regulations set out in CETA.
Examples of the permitted professions are: Engineers, Computer Systems Analysts, Accountants, and Management Consultants, Financial and Insurance Managers (advisory and consulting only), Advertising Managers, and Market Research Managers.
- Applicant qualifications criteria: applicants in either professional category must possess:
- a university degree or a qualification demonstrating knowledge of an equivalent level; and
- professional qualifications if required to practice an activity pursuant to the laws or requirements in the province or territory where the service is supplied.
Some categories of engineering and scientific technologists are eligible to enter Canada as professionals without a university degree.
Criteria for contractual service suppliers
Contractual service supplier means an employee of an enterprise in the European Union (EU) who has a contract to supply a service to a Canadian consumer. The EU enterprise cannot have an establishment in Canada.
In addition to the general criteria listed above, as a contractual service supplier, the applicant must also:
- be engaged in the supply of a service on a temporary basis as an employee of an enterprise which has obtained a service contract;
- have been an employee of the EU-headquartered enterprise for at least one year prior to application;
- possess three years of professional experience in the sector of activity that is the subject of the contract at the date of submission; and
- not receive remuneration for the provision of services other than the remuneration paid by the enterprise employing the contractual service suppliers during their stay in Canada
Criteria for Independent Professionals
Independent professional means a self-employed professional who has a contract to supply a service to a Canadian consumer.
In addition to the general criteria listed above, as an Independent Professional, the applicant must also:
- be engaged in the supply of a service on a temporary basis as a self-employed person; and
- possess at least six years of professional experience in the sector of activity which is the subject of the contract as of the date of submission of an application for entry into Canada.
Under CETA, there are two categories of business visitors: short-term business visitors and business visitors for investment purposes.
All CETA business visitors may seek entry to Canada for a number of regular visits related to a specific project. These visits may take place over a period of weeks or months.
The activities listed below apply to short-term business visitors from an EU member state entering Canada.
- Meetings and consultations
- Research and design
- Marketing research
- Training and seminars
- Trade fairs and exhibitions
- After-sales or after-lease service
- Commercial transactions
- Tourism personnel
- Translation and interpretation
Restrictions on Business Visitor Eligibility under CETA
Short-term business visitors cannot:
- Engage in selling a good or a service to the general public
- Receive remuneration directly or indirectly from a source in Canada
- Be engaged in the supply of a service, except as provided in Annex 10-D
CETA sets conditions whereby people may be transferred to work in Canada within the same affiliated Canada company.
Under CETA, all intra-company transferees must:
- Have been employed by an enterprise of, or have been partners in an enterprise of, an EU member state for at least one year; and
- Be temporarily transferred to an enterprise (that may be a subsidiary, branch or head company of the enterprise) in Canada.
The applicant must belong to one of the following categories:
- Senior personnel and specialists
- Graduate trainees
In addition to the criteria outlined above, graduate trainee applicants must:
- Possess a university degree; and
- Be temporarily transferred to an enterprise in Canada for career development purposes or to obtain training in business techniques or methods
CETA provides provisions that allow eligible investors to stay in Canada for up to one year, with the possibility of extending their stay at the discretion of an officer.
The investor provisions of CETA apply to applicants who:
- Will establish, develop or administer the operation of an investment in a capacity that is supervisory or executive;
- Are the investor; and
- Are employed by an enterprise that has committed or in the process of committing a substantial amount of capital.
At BEFFA LAW, we had successfully prepared application for CETA work permits, and carefully crafted the supporting documentation for the corresponding applicant category. If you are interested in obtaining a CETA work permit, please reach out to us!