Seasons Greetings to All Our Customers, Visitors, Affiliates and Partners!

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Whatever holiday you’re celebrating at this time of the year, we’d like to wish you all the best, and may it be a very happy and safe holiday, spent with those that you love.

Merry Christmas!

Happy Hannukkah!

Happy Kwanzaa!

Happy Pancha Ganapati!


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How to Protect Your Business From Creditors

The time to protect your assets and your investment in your business from creditors is before any financial problems arise.

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If you attempt to protect your business assets after you borrow money or after a financial or creditor issue arises, you may allow your business creditors a better chance of accessing your assets and challenging any planning you have done.


As a shareholder of the business, your exposure is generally limited to the amount of your investment, both by way of shareholdings and through shareholder loans to the corporation. However, various situations may arise which impose liability upon you. If you have given a personal guarantee to guarantee the debts and obligations of the corporation, creditors may be able to sue you and attach your personal assets (by way of garnishment or seizure) to cover the amount guaranteed.

As a director or officer of the corporation, you may also have additional personal liability for such things as unpaid employee salaries, uncollected or unremitted sales or other taxes, unremitted payroll deductions, and breach of contract.

How to Protect Your Personal Assets

Prior to signing a personal guarantee, engaging in a new business opportunity or agreeing to be a director or officer of a corporation, you may want to consider the following strategies:

  • Transferring your personal assets to your spouse or some other party (at fair market value).
  • Investing your money in assets which are exempt from creditors’ claims.
  • Setting up an asset protection trust in a foreign jurisdiction.

Protecting the Company’s Profits

There are similar steps you can take to protect the profits of the business:

  1. Establish a holding company to hold the shares in the corporation. The profits of the business could then be paid on a tax-free basis to the holding company through dividends on the shares. Those profits could then be reinvested or loaned back to the business as a shareholder’s loan, which would ensure that the business’ cash flow remains unaffected. The business can grant security back to the holding company for repayment of the loan, making the holding company a secured creditor. In addition, the holding company can purchase equipment or land required by the business and then lease it back to the business, at a profit. These assets could then be out of reach from business creditors.
  2. Set up a trust. Any shares in the holding company could be transferred to the trust, and any funds paid by the holding company to the trust by way of a dividend would belong to the trust for the benefit of the trust beneficiaries. These funds would not be available to creditors even if one or more of the beneficiaries signed personal guarantees, or have other personal obligations.

All creditor proofing strategies require careful consideration of taxation issues so as to avoid income attribution problems or the unexpected triggering of capital or income gains. The above opportunities and strategies represent only a sample of what ought to be considered. Each circumstance will offer its own opportunities and restrictions on planning.

Posted in Borrowing, Business Financial Planning, personal guarantees | Leave a comment

Get That Damage Deposit Back! A Checklist Every Tenant Should Follow

You’ve given notice to your landlord and now it’s time for you to move. Are you worried about getting your damage deposit back? Provided that your landlord is a reputable sort, and provided you’ve been a good tenant and have kept the premises clean and in good repair, there should be no reason for the landlord to keep any part of your deposit. But even the best of tenants can overlook something, so here is a list a number of things you can do before you move to improve your chances of getting all of your damage deposit back.

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1. Overall repair. The rental unit should be left in at least as good a state of repair as when you moved in. Any damage made by you, your guests or your pets should be repaired. Did you do a walkthrough with the landlord before you moved into the place? If so, you should have a copy of the walk-through inspection report, listing all items that required repair or showed some damage, so that if these items were not repaired during your tenancy, they do not get charged against your damage deposit when you move out.

2. Clean the windows and the window coverings. Plastic blinds should be dusted first, then carefully sponged clean. Fabric blinds should be vacuumed, then steam cleaned. Drapes should be dry cleaned.

3. Clean the carpets. Rent a carpet steamer so you can thoroughly clean the carpets after the larger furniture items have been removed. A steamer will lift the dirt and stains out better than shampooing, and does not leave as much residue behind. If the carpets are badly stained, hire a professional carpet cleaner. If you don’t do it yourself, you’ll most likely still have to pay for a professional cleaning because the landlord will deduct it from your deposit.

4. Walls and fixtures. Thoroughly wash walls, ceilings, and light switch panels, and dust and clean all light fixtures. Replace any burned out light bulbs.

5. Storage areas. Wash closets, cabinets and drawers inside and out, including door handles and drawer pulls. Use an old toothbrush or nail brush to get down into grooves. Use a good wood cleaner like Murphy’s oil soap for wood cabinets and drawers.

6. Countertops. Remove stains from laminate countertops with lemon juice or bleach – BUT be careful if you are using bleach because it may remove the color from the surface. Granite and marble countertops should only be cleaned with soap and water.

7. Thoroughly scrub all floors. Put a no-wax finish on any no-wax flooring, and paste wax on linoleum that requires waxing. Use an oil soap such as Murphy’s to wash hardwood and laminate floors. You can also use paste wax on hardwood, then polish well. Tile floors should be washed with soap and water.

8. Give the stove a thorough cleaning. Remove the burners, clean underneath and wash the burner trays to remove burnt-on stains. Pull the knobs off the stove and clean behind them, and clean the knobs before replacing. If the oven is not self-cleaning, use a spray-on oven cleaner to clean the oven – remember to wear rubber gloves and do not breathe in the fumes. If the stove has a ceramic cooktop, clean it well with a special ceramic cooktop cleaner, then rinse with water. NEVER use abrasive cleaners or scratch pads on the glass cooktop.

9. Wash the refrigerator inside and out. Use only soap and water on the inside. Defrost, if the fridge is not self-defrosting. Pull out all trays and clean underneath them. Wash all of the inside surfaces thoroughly, including inside the freezer.

10. Clean the dishwasher. Purchase a commercial cleaner for the dishwasher and follow the instructions to clean the inside of the dishwasher. Wash the outside thoroughly.

11. Clean the rest of the kitchen. Use a good strong cleaner to clean around and underneath the kitchen appliances. Clean the hood, face plate and switches of the kitchen fan. If possible, clean the filter as well.

12. Microwave. If there is a microwave provided with the rental, clean it thoroughly inside and out. Wash the glass tray in the sink, making sure to remove any residue completely.

13. Bathrooms. Thoroughly clean the sinks, tub, shower stall, tub surround, toilet and faucets. Use a toothbrush or nailbrush to get into grooves in the faucets. There are a number of good commercial products that remove lime, mineral build-up and mildew. Leave everything sparkling.

14. Glass. Use glass cleaner, or a mixture of water and vinegar, to get the mirrors and chrome fixtures spotless.

15. Outdoor areas. Sweep and wash all patio, balcony, terrace and porch areas. Remove any trash and articles that belong to you or your family, pets or friends.

16. Wall repair. Fill all nail holes and other holes in the walls or ceilings with putty or drywall compound. Sand if necessary, and wash off the excess around the repaired area.

17. Other damage. Repair any other damage that occurred during your tenancy. You’ll pay for it anyway, so you might as well do it now. If the damage is extensive, talk to your landlord about it.

18. Clean your storage locker and parking space. Remove everything from your storage locker. If your vehicle has leaked oil or other fluid in your parking space, use a commercial oil stain remover to get rid of it.

19. Furnishings. If the premises are furnished, you will need to ensure that all furniture is left clean and in good repair. Upholstery should be steam cleaned. Mattresses should be vacuumed and, if possible, aired. Chairs and tables should be washed, and everything should be dusted.

20. Take out the trash. Remove any garbage, cleaning products, pizza boxes, soda cans, etc. before you leave. The premises should be empty of all debris, and as a final touch, leave a plug-in air fresher plugged in to make sure it smells fresh and clean too.

21. Drop off the keys. Be sure to turn in all keys, garage door openers, security cards, storage locker locks (if provided by the landlord), and other items that must be returned at the end of your tenancy.

22. Utilities. Leave the utilities turned on until the landlord has had a chance to inspect the appliances.

23. Do a walk-through. Before you leave, do a thorough inspection yourself, looking at the space as though you were a new tenant moving in.

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