Llewellyn Law

08/03/2024

PLEASE KEEP THE BELOW IN MIND WHEN DISCUSSING ANYTHING ABOUT THE OLYMPICS...

or for that matter

When you are debating or commenting about any thing about Sport and Sport Championships

that is to say: "what is the point of all of it?"
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Olympic Creed

"The most important thing in the Olympic Games is not to win but to take part, just as the most important thing in life is not the triumph but the struggle.”
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Olympic Oath

“In the name of all the competitors I promise that we shall take part in these Olympic Games, respecting and abiding by the rules which govern them, committing ourselves to a sport without doping and without drugs, in the true spirit of sportsmanship, for the glory of sport and the honour of our teams.”
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Olympic Movement

The Olympic Movement encompasses organizations, athletes and other persons who agree to be guided by the Olympic Charter. The goal of the Olympic Movement is to contribute to building a peaceful and better world by educating youth through sport practised in accordance with Olympism and its values.
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Olympic flag and its Rings

The Olympic Flag and Rings stand for the values of the Olympic Movement.

The five rings represent the five continents, while the blue, black, red, yellow and green colours of the rings, and the white background of the Olympic flag were chosen because at least one of these colours is included in the flag of every nation.

The rings are interlaced to represent the universality of the Olympic Movement and the meeting of the athletes from all over the world in the Olympic Games.
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Olympic Motto

‘Citius, Altius, Fortius’
is a Latin meaning
‘Faster, Higher, Stronger’.

It encourages the athletes to give their best during competition and ‘represents an ideal as an important life lesson that could be gained from participation in sport and the Olympic Games:

“that giving one’s best and striving for personal excellence was a worthwhile goal.’
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Fundamental Principles of Olympism

1. Olympism is a philosophy of life, exalting and combining in a balanced whole the qualities of body, will and mind. Blending sport with culture and education, Olympism seeks to create a way of life based on the joy of effort, the educational value of good example, social responsibility and respect for universal fundamental ethical principles.

2. The goal of Olympism is to place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.

3. The Olympic Movement is the concerted, organised, universal and permanent action, carried out under the supreme authority of the IOC, of all individuals and entities who are inspired by the values of Olympism. It covers the five continents. It reaches its peak with the bringing together of the world’s athletes at the great sports festival, the Olympic Games. Its symbol is five interlaced rings.

4. The practice of sport is a human right. Every individual must have the possibility of practising sport, without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play.

5. Recognising that sport occurs within the framework of society, sports organisations within the Olympic Movement shall apply political neutrality. They have the rights and obligations of autonomy, which include freely establishing and controlling the rules of sport, determining the structure and governance of their organisations, enjoying the right of elections free from any outside influence and the responsibility for ensuring that principles of good governance be applied.

6. The enjoyment of the rights and freedoms set forth in this Olympic Charter shall be secured without discrimination of any kind, such as race, colour, s*x, s*xual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status.

7. Belonging to the Olympic Movement requires compliance with the Olympic Charter and recognition by the IOC.
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Olympic Anthem

Olympian flame immortal
Whose beacon lights our way
Emblaze our hearts with the fires of hope
On this momentous day

As now we come across the world
To share these Games of old
Let all the flags of every land
In brotherhood unfold

Sing out each nation, voices strong
Rise up in harmony
All hail our brave Olympians
With strains of victory

Olympic light burn on and on
O’er seas and mountains and plains
Unite, inspire, bring honour
To these ascending games

May valour reign victorious
Along the path of golden way
As tomorrow's new champions now come forth
Rising to the fervent spirit of the game

Let splendour pervade each noble deed
Crowned with glory and fame
And let fraternity and fellowship
Surround the soul of every nation

Oh flame, eternal in your firmament so bright
Illuminate us with your everlasting light
That grace and beauty and magnificence
Shine like the sun

Blazing above
Bestow on us your honour, truth and love
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Olympic Charter

The Olympic Charter states that the practice of sport is a human right. It underscores that every individual must have the possibility of practicing sport, without discrimination and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play.

07/27/2024

1976 Montreal Olympics
Ray Takahashi – Men’s Freestyle 48 kg, Thunder Bay
Gord Bertie – Men’s Freestyle 52 kg, Edmonton
Mike Barry – Men’s Freestyle 57 kg, London
Egon Beiler – Men’s Freestyle 63 kg, Thunder Bay
Howard Stupp – Men’s Freestyle 63 kg, Montreal
Clive Llewellyn – Men’s Freestyle 68 kg, Thunder Bay
Brian Renken – Men’s Freestyle 74 kg, London
Richard Deschatelets – Men’s Freestyle 82 kg, Guelph
Terry Paice – Men’s Freestyle 90 kg, Thunder Bay
Steve Danier – Men’s Freestyle 100 kg, Thunder Bay
Harry Geris – Men’s Freestyle 100+ kg, London
Mitch Kawasaki – Men’s Greco-Roman 48 kg, Thunder Bay
Doug Yeats – Men’s Greco-Roman 57 kg, Montreal
John McPhedran – Men’s Greco-Roman 68 kg, Toronto
Brian Renken – Men’s Greco-Roman 74 kg, London
Dave Cummings – Men’s Greco-Roman 82 kg, Thunder Bay

12/28/2023

When you need to see a lawyer:

Everyone, at some time, will have a need to see a lawyer.

Your first legal step should be to become organized before you meet your lawyer.

This may be a positive experience in the context of purchasing a home, or entering into a business relationship, or seeking advice in respect of legal arrangement and financial planning such as a will or a family trust, or the incorporation of a business.

Sometimes the need to see a lawyer will be as a result of an adverse matter, in the nature of a marriage breakdown, a breakdown of a contractual relationship, an insolvency, a motor vehicle accident, a death in the family, and so forth.

Many people have never had to deal with a lawyer on a significant matter (other than perhaps a house purchase), and do not know the ins and outs of retaining a lawyer in the most efficient and most cost effective manner. In my 40+ years’ experience, even clients who have previous dealings need to reconsider their approach with lawyers.

In my experience, most persons are intimidated by the concept of retaining a lawyer, and the legal fees that will be charged, and are in awe of the legal process.

A significant amount of “what a lawyer does” is simply gathering and writing down, and thereby organizing, the client’s information.

This information is required in all instances of law, whether the proceeding is in a criminal matter or civil matter; or in a contractual matter or in a litigation matter.

In all instances, the initial and most important step in seeing a lawyer is communicating your information; this is information about yourself, about the parties involved, and about the circumstances or details regarding the legal issues.

It is this process that most people, indeed almost all clients, are ineffective.

As a result, clients incur significant unnecessary legal fees, and this results in significant delays in the solving legal issues.

It should be a precondition to meeting with a lawyer that the client (or proposed client) takes time to prepare their information.

By putting this in the context of lawyers’ hourly rates (even a very junior lawyer these days is charging $200/hour and a senior lawyer upwards to sometimes $1,000/hour). The paying client generally is nowhere near that kind of hourly rate.

In that context, a client should spend significant hours preparing before paying for 1 hour of a lawyer’s time.

When you are doing your preparation, and when you say to yourself: “that is good enough”, you should take a break to refresh yourself, and then return and assess whether there is further information that may be useful to the lawyer.

Lawyers are trained to read. Most lawyers’ will read and assess your notes quickly. The written information you provide may allow the lawyer to adopt, or adapt, that information. The initial costly and lengthy meetings with clients would be reduced to a short meeting, if the potential client had prepared properly.

Once the overview . detailed communication from you is received by the lawyer, the lawyer or the lawyer's staff can easily advise you on any further information you need to organize, as a first step before you meet your lawyer.

This will ensure that, when you do meet a lawyer, you are fully and adequately prepared, and in doing so, this will ensure that your dealings with lawyers are efficient and cost effective.

09/08/2022

Are you preparing for a Pre-Trial Conference in Provincial Court (aka Small Claims)?

Visit our blog for important points to consider.

If you are a party litigant to a Provincial Court (Small Claims) Action that has passed the Mediation stage and will go to trial, the Court shall schedule a Pre-Trial conference with a Judge to determine whether your claim may settle, and if not, what steps are required for a trial.

09/26/2020

If you are involved in a business in Alberta Canada- here is “Corporate Law 101”

This sets out the fundamental legal concepts relating to corporations, and their shareholders, directives, employees, creditors, and secured creditors in the jurisdiction of Alberta Canada.

Firstly, a corporation (sometimes referred to as a “company”) is an entity created by a statute, such as the Business Corporations Act of Alberta or the Canada Business Corporations Act. The essential nature of a corporation is that it is a “created entity”, and is complete and distinct from the person or persons that created the corporation, who are generally referred to as the “Incorporators”.

The corporation is formed by completing the necessary forms under the Business Corporations Act, and forwarding the same for acceptance to the Corporate Registry. Providing the documents are in proper form, the corporation shall be accepted, and the “company” will be created and will be given a number.

That is the concept of a “numbered company”. However, instead of having a company named by number, in addition to the number, the company can request a unique name.

Choosing a Company Name:
When choosing the name of the company, keep in mind that in order to effectively maintain the corporate identity, to be separate from the incorporator or shareholder or director, the full and proper name of the company must always be used.

A company with many words in its name will tend to be shortened in practice and in usage, and that will then remove its actual corporate separate legal identity. This is a problem. We recommend a short company name, to avoid this problem.

Incorporated, the company may be labelled to be a “Limited”, “Ltd”, “Incorporated”, “Inc.”, “Corporation”, or “Corp.” or even “Co”. All of these usages reference that this is a “limited liability company”.

Liability of Shareholders:
The nature of a limited liability company is that the shareholders, who in that sense “own” the company or corporation, do not themselves have liability for any of the debts of the company. The liability of these owners (shareholders) is limited to whatever monies were put into the company, and nothing more.

The concept of limited liability, however, cannot limit a shareholder who is active in the company from being liable for his/her own acts of fraud, or his/her own acts of negligence. If any acts of fraud, or acts of negligence, may be attributed to that person, that person is liable.

Guarantee of Loan for the Company:
Further, because of the nature of the limited liability of the company, if a company is to borrow money, or if the person is to extend credit to the company such that the company owes money to the shareholder, the lender or the creditor will likely want to ensure there is someone other than this limited liability company who is responsible for payment.

The creditors or lenders often will get around this limited liability by insisting that the shareholders or directors of the company (or some other person) guarantee the repayment of the indebtedness or the performance of the obligation.

However, not all lenders or creditors have the negotiating strength to be able to insist on such a guarantee. Further, it is possible to have these guarantees themselves be “limited” in nature, and in amount.

However, the essential concept must always be kept in mind that the company is separate from the shareholders, who are not one in the same. There have been attempts at times for creditors and lenders and other persons who have “complaints” against the company to attempt to argue that the company is really the “alter ego” of the shareholders, or that they should be treated as one in the same, or, using legal jargon, the claimants seek to “pierce the corporate veil”.

The concept in that while there is a separation between the shareholders and the company, sometimes it is argued that this is only a “thin veil” that ought to be removed under certain circumstances.

Directors:
Once incorporated, the Business Corporations Act requires that there be Directors of the company. The Act governs who is permitted to be a director, and whether all or some of the directors need to be Canadian citizens. A director cannot be a bankrupt.
The Director is the active controlling mind giving directions (hence “director”) to the affairs of the company. There can be a “board of directors”.

The Board of Directors may designate some persons to be “Officers” of the company, to carry on day to day affairs of the company. Those officers are often referred to as the President, or the Treasurer, or the Secretary. These officers may also be the Directors, and may also, in another capacity, be the shareholders (and this is often the case).

Directors have obligations to act with what is known as a fiduciary duty, which can be characterized as an obligation or duty to look after the best interests of the company. Quite often at times this obligation is overlooked when the Directors are acting in their own interests and not in the interests of the company.

Director’s Liability:
In certain situations, the limited liability protection aspects of a corporation has been eroded by legislation.
In Alberta Canada, the Directors are directly liable for unpaid GST, for unpaid Employee Income Tax withholdings, unpaid WCB payments, and Directors will be liable for 6 months wages for employees who are not paid.

Sometimes a Director may avoid the foregoing statutory liabilities providing the Director can demonstrate the Director was duly diligent, such that Director should not be responsible for the non-payment.

However, simply put, if the company has not made these payments, it will be difficult for a Director to avoid personal liability in that regard. It is for this reason that Directors must be confident of the financial status of the company, and directors must ensure that these statutory obligations are paid in advance of other liabilities.
In these circumstances, often directors insist that there be Director’s “Errors and Omission” insurance to cover any liability in that regard.

Shareholders:
The Shareholders are, in a simple sense, the “owners” of the company and give directions to the company by appointing directors. The appointment of directors occurs at an Annual General Meeting (AGM) that must be held each year, as required by the Act.

At an AGM, the Shareholders review the “audited” (unless the Shareholders waive the requirement for an audit) financial statements of the company, and review the affairs of the company, and can pass resolutions regarding the business of the company and the direction the company may take those directions, to be implemented by the Directors.

A Shareholder can request a Special Meeting of the Shareholders, and may in that regard change the manner in respect of how the company shall carry on its affairs.
The shareholders may remove directors from Office.

Unanimous Shareholders Agreement:
At times, the Shareholders will decide that they need to place restrictions on the affairs of the company and upon the directors, and in other business matters, and will enter into what is known as a Unanimous Shareholder’s Agreement (or referred to as an USA).

The USA will often make changes to what would otherwise be the voting powers of Shareholders, or may fix management fees may be paid, or, may set out how monies will be contributed into the company by way of Shareholder loan or otherwise, or may direct how dividends and other payments will be made from the company and, equally important, may set out how one Shareholder may buy the other Shareholder’s shares in the company (often referred to as a buy-sell clause, or sometimes referred to as “shotgun” clause).

It is prudent for Shareholders to have a USA if there are any Shareholders who hold less than 50% of the company.

Windup of Company:
On the windup of the company, all assets are sold, all debts paid and any surplus shall be distributed to the Shareholders. Usually in payment of their Shareholder’s Loans.
Profits:

Shareholders are entitled to dividends from profits from the company at year end, providing that the Shareholders vote in favor of such a dividend.

The Directors normally make recommendations in that regard.
Not all profits of the company each year need to be paid out to Shareholders, and it is usual for a significant amount of the profits to be retained in the company, and these are referred to in the financial statements of the company as “Retained Earnings”.

How to become a Shareholder:
A Shareholder may become a Shareholder in a number of ways, such as:

1. The incorporator may become the initial Shareholder. Typically, when this occurs, the price paid for the shares issued by the company and the price paid to the company, will be nominal. Usually this is $1 a share, and usually 100 shares are issued (this will be discussed below).

2. After a company has commenced, new shareholders may become Shareholders by: either:
a) Purchasing shares from an existing Shareholder at a price that they negotiate between them; or
b) the company can issue more shares from the “treasury” of the company.

3. Those shares must reflect a fair amount of value of the company. Accordingly, if there were initially 100 shares issued to the initial, only one, incorporator, this incorporator could add a 50% shareholder by either:

a. having the corporation issue another 100 shares. Those then now 200 issued and outstanding shares would then have a value reflective of the value of the company (after the shares have been paid for); or

b. the initial incorporator may sell ½ of his 100 shares, at whatever price he negotiates, such as there are now 2 Shareholders each holding 50% of the 100 issued outstanding shares.

Shareholders vote for Directors:
These Shareholders give direction by what is known as a “Shareholder Resolution” arising from a Shareholder meeting to this affect.

A Shareholder meeting may be held in person with everyone in attendance or, depending on the bylaws of the company may be done by proxy, or by telephone meeting or otherwise.
Sometimes a Shareholders meeting can be done in effect by all Shareholders simply signing a resolution to that effect.

Providing Monies to the Company:
A company may obtain monies to operate through a number of sources.

Firstly, a Shareholder/ incorporator may decide to capitalize the company by issuing shares and having the Shareholder pay to the company monies for the purchase of those shares. When the company is created, it has zero “book” value.

The incorporators may cause the company to issue 100 shares to the incorporator at a price. For example, typically it is 100 shares at $1, and the company received a total of $100. At that point the company is worth $100 and therefore the shares of the incorporator reflecting the value of the company would be worth $100. ($1.00 each Share). The company could then use the $100 to carry on business.

Secondly, instead of issuing the corporate shares from treasury for $100, the company could simply issue the shares the total of $1, and obtain $99 loan from the Shareholder (this is often referred to as a Shareholder Loan). At that stage, the company will have $100 in the company but it will have indebtedness due to the

Shareholder for $99, and as such the company’s net value in effect would be affectively $1. However, the company will have $100 to utilize in its business and to earn a profit.

Thirdly, the company could obtain a loan from a bank. The bank could lend $100 to the company. The company would then have an indebtedness due to the bank of $100 and the net value in the company, therefore, is $0. In order for the bank to lend the money to the company, however, the bank will take security over the assets of the company (the $100 placed in the company) but will generally require a guarantee of the shareholders of the company or its Directors. That guarantee may or may not be secured on other assets of the guarantor (such as a mortgage on the guarantor’s home).

Keep in mind that a Shareholder who makes a loan to the company is not legally different from a bank or other lender that lends money to the company. The Shareholder is also permitted to take security over the assets of the company, similar to a bank lender.

The Shareholder may also require other Shareholders to guarantee the indebtedness. These are all negotiated situations.
Fourthly, the company can earn income. Once the company earns income by its operations, then and after payment of the expenses incurred in those operation (including the wages to be paid to the employees of the company), the net profits remain in the company.

After taxes are paid on those net profits at the corporate tax rate, the company has a choice of paying dividends on those net profits to the Shareholders, or retaining the profits in the company to grow an even bigger business. The decision making in this regard is generally done at the Shareholders AGM, and/or through other Special Meetings of the Shareholders. In between meetings with Shareholders, the Directors of the company make the decisions in this regard (reflective of the best interest of the company and sometimes reflective of the best interests of the Shareholders).

Shareholders as Employees:
Being an employee of the company is a different capacity than Shareholder of the company. It is different than being a Director of the company. However, being an employee of the company may also be a Shareholder, and may also be a Director, depending on the circumstances.

For this reason, the company must be careful in deciding whether or not it is going to permit an employee of the company to become a Shareholder.

If, at a later date, there is reason for the employee to be terminated from the company, unless there are specific agreements in place to this effect, the employee will also remain a Shareholder, which may be problematic within the company.
Employment Contract:

If this is an important employee of the company, it is appropriate for there to be an employment agreement with the employee. This contract will generally set out the terms of the employment and the remuneration, but should also set out the terms of what occurs upon termination the employee, would the employee be restricted from carrying on business similar to that of the company (this is referred to as a non-competition clause).

The Agreement should specify that upon termination, the employee must return all company property and information to the company, and shall specify that the employee must agree not to use any confidential information of the company for his own use at a later date. Further, the employee must agree not to disclose confidential information regarding the affairs of the company to third parties, not in the best interest of the company.

Overall:
Overall, in all of these circumstances, it can be seen that one person, in many capacities, might be the Incorporator, the Shareholder, the Director, the Officer, the Employee, and the Secured Creditor or the Unsecured Creditor of the Company.

All of these different “hats” or capacities are important to understand, and must be kept separate in one’s thinking, in respect of and regarding the affairs of the company, and such particular person’s relationships to the company.
So — that is “corporate law 101” distilled.

Clive Llewellyn — Llewellyn Law

09/01/2020

I was sending a letter out on a corporate file this week, and it crossed my mind to post about matters which should be considered if a person is in any way involved with a Corporation, keeping in mind the distinction between individuals and the separate legal entity and nature of the Corporation concept.

Nature of Corporation

Often I hear persons say, “they are the owners of the business”. Then I find out that, in fact, a company, in respect of which the person is a shareholder, owns the business.

The whole point behind incorporation is to ensure that “no person is the owner of the business” and therefore no person has liability - hence the term “Limited” or “ Ltd.” for limited liability; or “Inc.” or Incorporated or “ Co.” meaning a separate entity.

A person holding themselves out as “the Owner” may in fact create personal liability for themselves!

Care must be maintained to always use the full name of the Company on all documents, invoices, cheques and correspondence. Not doing so, using some shortened version out of laziness, may create personal liability.

Shareholders
Shareholders have certainty rights, if the shares as defined grant such rights, such as:
• the right to be involved in the election of officers and directors
• the right to dividends
• the right to any remaining on a wind up of the company and payment of creditors’ claims.

There can be various classes of shares, each class holding different rights.

Although the nature of the limited liability concept is the foundation of the legal principle relating to corporations, often creditors or lenders to the Company may require a personal guarantee of financial obligations by a shareholder, thereby re-creating some personal liability

Directors
Directors are the decision-makers of the company, and are elected by shareholders.

Although shareholders have the limited liability, directors have possible liabilities for the affairs of the company, including but not limited to: Revenue Canada Employee income tax withholdings, GST, and WCB payment obligations.

Depending on the jurisdiction’s employment legislation, directors may be liable for some employee wages,
Also, if in the course of business representations are given to third parties, upon which third parties rely, the person giving the representations (directors or officers, or shareholders, or employees) may by doing so create personal liability to themselves.

Further, one cannot escape liability for fraud or false statements, by claiming the defence that these activities were done by the corporation, if one was involved in some way in the fraud or false statements. Care must be taken.

Officers
Generally speaking the officers are the persons who implement the directions, policies and business activities approved by the directors, and through such directors by the shareholders.
Officers have possible liabilities for the affairs of the company including but not limited to: Revenue Canada Employee income tax withholdings, GST, WCB, employee obligation; and as set out above, for fraud claims.

Minute Book and Corporate Registry
The Corporate Minute Book, containing all the important corporate documents (the constitution, By-laws, any shareholder agreement, records of shareholders, records of officers and directors, and important corporate decisions (Minutes and Resolutions) is a fundamental requirement of a corporation.

This Corporate Minute Book must be kept up to date, and must record all the aforesaid “governing “ documents.

The government’s Corporate Registry records should reflect the Minute Book, and do not stand alone. Often the Corporate Registry records may not be up to date, so these are not the governing records. One must review the Minute Book.
Importantly, each year an Annual Return must be filed, updating the directors of the company, and any major changes over that year.

Failure to file the annual returns at Corporate Registry shall result in the dissolution of the company after some deadline.
Dissolution is akin to a “death” of the company, which is problematic if the shareholders/officers/directors wish to maintain limited liability, and wish to maintain any tax benefits of a company.

The Corporate Minute Book should be kept at the Registered Office of the Company

Registered Office
The Registered Office is important, since this is where legal documents may be served against the Company, binding the Company.

For this reason, it is most appropriate to ensure the registered office is at a law firm, although that is not a legal requirement (at least in some jurisdictions) .

Often when the registered office is not a legal office, legal documents go unattended, and a Company may find that a judgment or some other act has occurred against the Company simply because no one responded to properly served documents at its registered office. As a result, not using a law firm creates risk.

Corporate Matters
It is important that you have an understanding regarding the legal nature of a corporation, and the various legal relationships of its principals to the Company, such as:
• as Shareholder
• as Officer and as Directors
• as Creditors (for example- shareholder loans),
• as Secured Creditors (a principal may take security against the Company for monies owing),
• as Employees,
• as Guarantors,

There are other “corporate” issues that ought to be considered, and perhaps put in place, such as
• Shareholder Agreements
• Shareholder Loan and Security Agreements
• Employment Agreements
• Indemnity Agreements
• Management Agreements

At times it is useful to consider:
• Shares may be strategically held in a “discretionary” trust (often called a family trust).
• Reasons to have classes of shares
• Directors’ “errors and omission” insurance
• “Key Man” life Insurance

I post the foregoing to raise awareness of the many considerations in respect of which persons involved in any way with corporations should be aware.

Having read the above, and if it applies to you, I suggest you canvass these topics with a lawyer in your jurisdiction.