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Advise on Corporation
- Thread starter AlexLitty
- Start date
arbortrail22
Member
After tax value.
Probably a few ways to play this...
Set up a new corp and move half of the retained earnings into that corp. Then you can slowly pay out of your corp without paying the highest bracket.
Sign over ownership of the first corp to her and then she can do whatever she wants.
Also if you liquidate your Line 150 goes way up ... this could have issues later on when dealing with spousal and child support... you never know...
Probably a few ways to play this...
Set up a new corp and move half of the retained earnings into that corp. Then you can slowly pay out of your corp without paying the highest bracket.
Sign over ownership of the first corp to her and then she can do whatever she wants.
Also if you liquidate your Line 150 goes way up ... this could have issues later on when dealing with spousal and child support... you never know...
Thank You ,
Another question
What if the current value of those investments have gone to 5million.I was extremely lucky to have bought Alberta Oil company stocks with those investments in June 2020 and it has grown to 5million from 900k . Fingers crossed that she doesnt come after the increased value post seperation .
Another question
What if the current value of those investments have gone to 5million.I was extremely lucky to have bought Alberta Oil company stocks with those investments in June 2020 and it has grown to 5million from 900k . Fingers crossed that she doesnt come after the increased value post seperation .
arbortrail22
Member
But aren't half the investments hers?
Why wouldn't she be entitled to the gain?
Why wouldn't she be entitled to the gain?
But aren't half the investments hers?
Why wouldn't she be entitled to the gain?
This.
Any lawyer worth their salt is going to argue the shares were held in trust and any increase in value would be considered owned by their client. The stocks should have either been frozen or the financial value held in a separate account.
You need a lawyer as well as an accountant.
arbortrail22
Member
If your going down a path where she currently doesn't know about the gain as she no longer has access to the accounts... that's a short path and will look very unfavourably on you.
It really depends on the corp and your business
If you are a dentist, your business has a value, medical doctor does not
The value of the corp is day of separation and it would be based on liquidated amount
This will simply go as part of equalization
Do not pay her anything from the corp, salary, wage from here on out
If you are a dentist, your business has a value, medical doctor does not
The value of the corp is day of separation and it would be based on liquidated amount
This will simply go as part of equalization
Do not pay her anything from the corp, salary, wage from here on out
Thank You
The professional corp is owned by me and was sitting on cash when I bought the stocks with the funds and borrowed on LoCs to fund the purchase. I have a business valuation being done to value the corp investments on the date of seperation . She is unlicensed to be allowed to own shares in a prof corp .I assume then its a business and corporate law would apply here ,where I have full control of the corp through voting shares . The courts cannot order a corp to be sold/liquidated except in extreme circumstances .
As i understand from a lawyers office website
Professional corporations (“PC”) are a helpful tool for many professionals, including dentists, doctors and lawyers, for dividing income with their spouse and/or deferment of taxes on income. New Brunswick courts have stated that if the spouse mainly utilizes the PC for tax deferral purposes or investment or savings, it is subject to a marital property division as a family asset. In one decision, the court held that the PC was a “cousin of the RRSP”. In contrast, if the spouse uses the PC principally in business or for an entrepreneurial purpose, a court may determine that it is exempt from division on the breakdown of the marriage. How the parties used the PC will primarily inform this analysis.
The professional corp is owned by me and was sitting on cash when I bought the stocks with the funds and borrowed on LoCs to fund the purchase. I have a business valuation being done to value the corp investments on the date of seperation . She is unlicensed to be allowed to own shares in a prof corp .I assume then its a business and corporate law would apply here ,where I have full control of the corp through voting shares . The courts cannot order a corp to be sold/liquidated except in extreme circumstances .
As i understand from a lawyers office website
Professional corporations (“PC”) are a helpful tool for many professionals, including dentists, doctors and lawyers, for dividing income with their spouse and/or deferment of taxes on income. New Brunswick courts have stated that if the spouse mainly utilizes the PC for tax deferral purposes or investment or savings, it is subject to a marital property division as a family asset. In one decision, the court held that the PC was a “cousin of the RRSP”. In contrast, if the spouse uses the PC principally in business or for an entrepreneurial purpose, a court may determine that it is exempt from division on the breakdown of the marriage. How the parties used the PC will primarily inform this analysis.
This.
Any lawyer worth their salt is going to argue the shares were held in trust and any increase in value would be considered owned by their client. The stocks should have either been frozen or the financial value held in a separate account.
You need a lawyer as well as an accountant.
It really depends on the corp and your business
If you are a dentist, your business has a value, medical doctor does not
The value of the corp is day of separation and it would be based on liquidated amount
This will simply go as part of equalization
Do not pay her anything from the corp, salary, wage from here on out
Thank You ,This is very helpful .Appreciate your help as to valuation =liquidation value on day of seperation . Can they ask for details of all financial investments of the corp .I spent 5k to get an official valuation of the business from BDO Canada including a professional valuator to present in courts if they argue . Similarly My RRSP and TFSA are up 5x since date of seperation . Fingers crossed they dont come asking for it as well .
Hmm
That’s a good question
I made investments after the separation and they shot up
The source of that was me deferring salary
I think I read somewhere that when it goes up like that it can be an issue
You should note that if she gets a million dollars one can argue that she can live off that and won’t need support
That’s a good question
I made investments after the separation and they shot up
The source of that was me deferring salary
I think I read somewhere that when it goes up like that it can be an issue
You should note that if she gets a million dollars one can argue that she can live off that and won’t need support
Well above my pay grade
I hope with 5mill u can get a good lawyer
Absolutely have a great laywer , best one in town . I was one of the lucky ones who came out on top after a divorce . My net assets have grown 5x post seperation including RRSP and TFSA . I started trading stock markets ,in my parents names so the income is not attributable to me . Atleast this money will be kept for my childrens education than leaving it to my ex who would blow it away .
Lets see what the courts have to say
Family court may not see it as simply corporation and she has nothing in it. It could be argued unjust enrichment with “borrowed” money. It’s not like a house or car etc. This is shares that were partially hers due to valuation. You had that money and were able to invest it. Not to mention a family court judge won’t get into the nitty gritty of corporate law. The judge will see it as an unfair advantage due to marital assets. You should speak to a family lawyer on it and as kkc said, if you make her an offer that saves you spousal in the long run (or legal fees) it may be worth your while.
Hmm
That’s a good question
I made investments after the separation and they shot up
The source of that was me deferring salary
I think I read somewhere that when it goes up like that it can be an issue
You should note that if she gets a million dollars one can argue that she can live off that and won’t need support
Good point ,very valid point ,there will be income imputed to the million$ which she gets
Family court may not see it as simply corporation and she has nothing in it. It could be argued unjust enrichment with �borrowed� money. It�s not like a house or car etc. This is shares that were partially hers due to valuation. You had that money and were able to invest it. Not to mention a family court judge won�t get into the nitty gritty of corporate law. The judge will see it as an unfair advantage due to marital assets. You should speak to a family lawyer on it and as kkc said, if you make her an offer that saves you spousal in the long run (or legal fees) it may be worth your while.
I hear you , family courts are tricky. I spoke to 3 lawyers and two agreed that courts value the corp on date of seperation.I am also preparing my corp lawyer to depose on my behalf during trial (12k for that) .Atleast that is what tmy ex asked as on date of seperation . The third lawyer said its tricky ,the outcome would be that the corp is kept as it is( and wont be liquidated and her capital will be kept as it is ) .
My business valuator also provided the same opinion , he has been a expert witness at many trials .
Hmm
That’s a good question
I made investments after the separation and they shot up
The source of that was me deferring salary
I think I read somewhere that when it goes up like that it can be an issue
You should note that if she gets a million dollars one can argue that she can live off that and won’t need support
Clear paperwork/namk statements and accounting trail that I took a 350k LoC to invest the funds in the corp,which has grown from 350k to 5million in 2 years .
Clear paperwork/namk statements and accounting trail that I took a 350k LoC to invest the funds in the corp,which has grown from 350k to 5million in 2 years .
If the debt is going against the value of equalization you will have to answer for what that was used for and that will call into question the value of the investments.
Your ex will be allowed to depose your parents if they have reason to believe you are hiding money. You are walking a fine line here trying to avoid showing what you have done. There is a difference between investing money after separation and incurring debt during the marriage to invest money you benefit from.
I really wish I could say what I invested in
But it would be a dead giveaway and I am only somewhat careful on the forum
I mean if it was your parents money and you told them what to buy it’s prolly okay. But if it is premarital money you dumped into a tfsa in their name it’s risky business
If the ex is somewhat reasonable and not fucking crazy money hungry alienator, just settle and party up with the 5 mill
But it would be a dead giveaway and I am only somewhat careful on the forum
I mean if it was your parents money and you told them what to buy it’s prolly okay. But if it is premarital money you dumped into a tfsa in their name it’s risky business
If the ex is somewhat reasonable and not fucking crazy money hungry alienator, just settle and party up with the 5 mill
respondent
New member
If your going down a path where she currently doesn't know about the gain as she no longer has access to the accounts... that's a short path and will look very unfavourably on you.
in stock market you haven't earned anything until you sold. I guarantee you that if this 1mln investment lost value to 200k, his ex's lawyer would claim that loss has nothing to do with their client.
By the book you need to take stock cost on the D.O.S. - I can give dozens examples where it will be incorrect for number of reasons, but likely judge, having zero knowledge in capital markets would tell "take the value on D.O.S."