How to Reduce your Legal Fees

As professions go, lawyers are probably among the most maligned out there. You definitely want a "barracuda" on your side but the moment an attorney starts serving you papers they become the bane of your existence.

If you're in business, you need a lawyer. Hopefully it will only be for the start-up and lease negotiation process and not defending you in a lawsuit.

Even with the simple contract work, legal fees can take a huge chunk out of your bottom line.

How can you reduce your legal fees? Consider these ideas: 

1)  Be clear on what you’re paying for

Before entering into any arrangement with a lawyer you should understand their billing practices. Instead of billing for every piece of work on an hourly basis, your potential attorney could work on a flat fee. This is a good arrangement especially if you are looking for contract review and not a lot of back and forth "fixes."

Understanding what you're paying for also means going over your bill every month. If something doesn't look right, ask your attorney for clarification.

Make sure to keep track of your own contacts with the lawyer to compare with the bill.

2) Think before you call or email

Having a lawyer at your disposal is a bit like living with a doctor; you just can't resist the urge to ask about every question that pops in your head. Just know that with a lawyer you're going to be billed for every phone call and email that you send.

Even if it takes them 30 seconds to respond, they're going to charge you at least a quarter of an hour.

All of this means to plan before you communicate. You might be able to answer your own question and save yourself some bucks.

3) Do some of the work yourself

Always keep in mind that lawyers will bill for everything. Reduce costs and time by making copies and delivering documents on your own. Also, try to respond in a timely manner whenever your attorney requests information. If they have to keep reminding you to submit something, that will be another charge.

4) Don't hesitate to shop around

Nurture a great working relationship with your lawyer. It could make all the difference. However, if you find them doing the kind of basic work that any decent attorney could do, you might be well advised to shop around. Find out what other attorney's are charging. Ask your friends who they use. Remember that the lawyer is working for you!

Is Buying a Shelf Company a Good Strategy?

As a startup business owner you might find yourself overwhelmed by all the new information you need to assimilate. This is especially true if you have designs incorporating your business and eventually taking it public. Just because you’re starting a business doesn’t automatically mean you need a business degree, but it will help to familiarize yourself with the basics. One business model concept you should be looking into is whether or not to buy a Shelf Company as part of your business strategy.

So, what exactly is a Shelf Corporation?

A Shelf Corporation or Aged Corporation is an official corporation that has been created but is not being used by that creator. There are many reasons why a corporation could still be idle but that doesn’t mean they don’t have any inherent value. Think of these as “instant” corporations as it pertains to helping your business start up. How can your business benefit from taking over a Shelf Corporation? Consider the following:

·         Time Saver

Buying a Shelf Corporation allows your business to get up and running a lot faster. The incorporation process can often drag on for months. With a Shelf Corporation that work has already been done. It would be like stepping into a franchise business. All the equipment and supplies have been purchased; you’re just taking over control.

·         Faster Access to Credit

Many vendors would prefer to do business with an established corporation. Therefore, a new startup might find obtaining lines of credit a challenge. An additional hurdle for a new business is being asked to provide a personal guarantee for loan. That could greatly hinder your chances to secure immediate financing. A Shelf Corporation can establish the kind of corporate longevity that can open up a lot more credit possibilities.

·         Instant Credibility

A Shelf Corporation allows your business to obtain instant credibility. This is important to potential investors. You’re not fooling anyone because the history of the corporation will be a matter of record. Instead, you’re stepping up your professional game and establishing your credentials.

·         Access To Government Contracts

Depending on your business, you might have the opportunity to do work for the government whether that is a local municipality or on a national level. These can be a very lucrative asset for your business. However, some government agencies require a business to be already be operational for a specific amount of time. You can meet that requirement with a Shelf Corporation.

How to Understand Canadian Small Business Taxes

Starting a small business means you’ll have the opportunity to become your own boss and make some of your dreams come true. It also means you’ll have to pay business taxes. For some small business owners paying taxes turns that dream into a nightmare. There are numerous resources you can tap into that can guide you through the completion of the tax forms if you decide to make it a DIY project. Many business owners prefer to bring in outside help like an accountant or tax attorney. Whichever option to choose, it will be helpful to begin with a basic understanding of small business taxes.

What Type of Business Are You?

Entering into a business means you have to pick which type of business you’ll be operating as. Your choices are:

1)      Sole Proprietorship

2)      Partnership

3)      Corporation

A sole proprietorship means you are the only owner and you’re not incorporating your company. With a partnership, there will be at least two owners (could be more) who contribute to the business. Any profits you make in a partnership will be divided based on the rates established in your partnership agreement. A corporation is a standalone legal entity that is allowed to sign contracts and own property. Many business owners choose the corporation option because it provides a level of protection for personal assets. In other words, if your corporation is sued then only the corporation’s assets are in play.

What Are the Filings Dates and Forms?

As sole proprietorship business owner you will be filing a personal income tax just as you would if you were working for someone else. You’ll pay taxes on all your business earnings that will be included on the T2124 Statement of Business Activities form. The fiscal year for a sole proprietorship ends on December 31^st. If you want to select a different end of the year in fiscal terms you’ll need to use form T1139. With the December 31^st end you’ll need to file by June 15^th.

With a small business partnership, the partners will file their share of the business earnings on their individual tax returns. The same filing deadlines as the sole proprietorship business apply.

A small business that has incorporated will use form T2 for corporate income taxes. That form needs to be filed within six months of the end of the business’ fiscal year. All tax forms for any type of business need to be kept for six years.

What Are the Earnings and Expenses?

Here’s where it gets a bit complicated. When a business records any type of earning or expense they need to use the Accrual Method. Translation: You’ll record revenue when you have delivered the good or service not when you’re paid for it. Same for expenses; you record when you incur the expense, not when you pay for it. This is why thorough record keeping is so essential for a small business. To make a business expense deduction, you need to prove that whatever you purchased was used exclusively by your business. As for earnings, that is considered as any money you take in that is a result of your business services.