Business owners and the spouses of business owners need to pay particular attention when determining the income of the parties following a separation. Business owners are often able to deduct expenses related to expenditures that would otherwise have been incurred by the individual personally with after tax dollars. Accordingly, business owners may be challenged that their income does not fairly reflect all the money available to them for the purposes of support.
A number of business deductions will often have a personal benefit component including vehicles, computers, cell phones, travel, meals and entertainment, insurance, non-arms length transactions, and more.
The family law lawyers at Forum Law LLP have dedicated experience reviewing General Ledgers (GLs), Profit and Loss Statements (P&Ls), and Corporate Financial Statements to advocate for the best results for our Clients.
Federal Child Support Guidelines – Federal Child Support Guidelines (justice.gc.ca)
Cunningham v Seveny, 2017 ABCA 4 – https://canlii.ca/t/gwthk
Sweezey v Sweezey, 2016 ABQB 131 – https://canlii.ca/t/gnn33
Oppression
It is not uncommon that shareholders will disagree to the control, direction, and overall governance of a corporation. Where there are shareholder disputes, federal and provincial legislation provides remedies to resolve shareholder disputes.
One of the most common remedies is oppression. The oppression remedy is a statutory remedy that seeks to rectify harmful conduct arising from the activities or governance of a corporation.
First, the court must consider whether has there been a breach of a reasonable expectation of a stakeholder? The second part of the test requires the court to ask whether the failure to meet the reasonable expectations of the stakeholder involved unfair conduct that led to prejudicial consequences. That “unfair conduct” is in the form of oppression, unfair prejudice or unfair disregard of a stakeholder’s interest. A court hearing an oppression remedy claim can make an order to rectify oppressive conduct that adversely affects the interests of the shareholder.
There may be a wide range of remedies available if the Court is satisfied that a corporation or any of its affiliates has engaged in conduct that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer including:
(a) an order restraining the conduct complained of;
(b) an order appointing a receiver or receiver‑manager;
(c) an order to regulate a corporation’s affairs by amending the articles or bylaws;
(d) an order declaring that any amendment made to the articles or bylaws pursuant to clause (c) operates notwithstanding any unanimous shareholder agreement made before or after the date of the order, until the Court otherwise orders;
(e) an order directing an issue or exchange of securities;
(f) an order appointing directors in place of or in addition to all or any of the directors then in office;
(g) an order directing a corporation, or any other person, to purchase securities of a security holder;
(h) an order directing a corporation or any other person to pay to a security holder any part of the money paid by the security holder for securities;
(i) an order directing a corporation, to pay a dividend to its shareholders or a class of its shareholders;
(j) an order varying or setting aside a transaction or contract to which a corporation is a party and compensating the corporation or any other party to the transaction or contract;
(k) an order requiring a corporation, within a time specified by the Court, to produce to the Court or an interested person financial statements or an accounting in any other form the Court may determine;
(l) an order compensating an aggrieved person;
(m) an order directing rectification of the registers or other records of a corporation;
(n) an order for the liquidation and dissolution of the corporation;
(o) an order directing an investigation;
(p) an order requiring the trial of any issue; and
(q) an order granting permission to the applicant to
(i) bring an action in the name and on behalf of the corporation or any of its subsidiaries, or
(ii) intervene in an action to which the corporation or any of its subsidiaries is a party, for the purpose of prosecuting, defending or discontinuing an action on behalf of the corporation or any of its subsidiaries.
