{"id":30610,"date":"2021-07-05T10:17:59","date_gmt":"2021-07-05T10:17:59","guid":{"rendered":"http:\/\/onlineclassesguru.com\/?p=30610"},"modified":"2021-07-05T10:17:59","modified_gmt":"2021-07-05T10:17:59","slug":"oan-smith-and-tony-jones-lifelong-friends-want-to-start-a-computer-software-business-they-are-both-married-and-have-young-children-and-their-spouses-are-not-working-both-joan","status":"publish","type":"post","link":"https:\/\/onlineclassesguru.com\/index.php\/2021\/07\/05\/oan-smith-and-tony-jones-lifelong-friends-want-to-start-a-computer-software-business-they-are-both-married-and-have-young-children-and-their-spouses-are-not-working-both-joan\/","title":{"rendered":"oan Smith and Tony Jones \u2013 lifelong friends \u2013 want to start a computer software business.  They are both married and have young children, and their spouses are not working.  Both Joan and Tony have computer expertise and want to be actively involved in the business."},"content":{"rendered":"<style type=\"text\/css\"><\/style><p><strong>Question 1<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Joan Smith and Tony Jones \u2013 lifelong friends \u2013 want to start a computer software business.\u00a0\u00a0They are both married and have young children, and their spouses are not working.\u00a0\u00a0Both Joan and Tony have computer expertise and want to be actively involved in the business.\u00a0\u00a0Both are employed by a very large software company and each earns employment income of about $50,000.\u00a0\u00a0They want to continue with this employment while they get their own business \u201coff the ground.\u201d\u00a0\u00a0Joan has no personal assets but Tony has just inherited a large sum of investments from his grandfather, and although some of that money will be used as startup capital for the business, Tony does not want to have personal assets at risk in the event the business is unsuccessful.\u00a0\u00a0Furthermore, Joan and Tony have prepared financial projections for the business which show that it will lose approximately $30,000 in the first two years of operations, and start making profits in the third year.<\/p>\n<p>&nbsp;<\/p>\n<p>Joan and Tony come to you, their lawyer(s), and ask for an opinion as to how they should organize their business and any other important issues they should consider before starting their business.\u00a0\u00a0Write an opinion letter to them, and consider all possible issues and considerations.\u00a0\u00a0Assume for the purposes of your answer that (1) the business is to be located in Nova Scotia (2) if they did incorporate their business it would qualify as a \u201cCanadian Controlled Private Corporation.\u201d<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Question 2<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>It is now four years later.\u00a0\u00a0Joan and Tony incorporate their business as Islander Software Consultants (\u201cISC\u201d).\u00a0\u00a0The authorized capital of the company is 1000 common shares with a nominal\/par value of $10 per share, and the issued capital is 100 common shares.\u00a0\u00a0Joan and Tony each own 50 of these common shares.\u00a0\u00a0The company has started to turn a profit, but as of the most recent fiscal year ISC has retained earnings of only $23,000.\u00a0\u00a0Joan and Tony want to get involved in tendering for some provincial government contracts, but in order to do so need additional capital of approximately $200,000.\u00a0\u00a0Their Bank already has lent ISC $150,000 and taken a debenture as security, but is unwilling to advance additional capital.\u00a0\u00a0Joan thinks that they should offer ISC shares to the public.\u00a0\u00a0Tony does not think this is necessary.\u00a0\u00a0Tony lost all of his inheritance on bad stock market investments.\u00a0\u00a0However, Tony has a rich uncle, Lenny Trump, who is prepared to invest the $200,000 in ISC.\u00a0\u00a0Lenny tells Tony that he trusts him to run the company, but the truth is that Lenny is a \u201ccontrol freak\u201d and if things don\u2019t go well Lenny will want to control the company.\u00a0\u00a0Both Joan and Tony do not want to lose control over their company unless it is absolutely necessary.\u00a0\u00a0Lenny is a risk taker and rich enough that if he loses his $200,000 it is not the end of the world, and he does not need an annual income or money from ISC.\u00a0\u00a0Joan is a bit unsure of the idea of accepting Lenny\u2019s capital, but Tony has told them that if he does not go along with the plan in some form then Tony will incorporate his own company and use Lenny\u2019s capital to develop new spreadsheet software that Tony developed when they were a partnership.<\/p>\n<p>&nbsp;<\/p>\n<p>(a) You are ISC\u2019s corporate solicitor.\u00a0\u00a0From ISC\u2019s perspective what is the best way or ways to structure Lenny\u2019s capital in ISC,\u00a0<strong>AND<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>(b) You are Joan\u2019s solicitor.\u00a0\u00a0From Joan\u2019s perspective (i) what is the best way or ways to structure Lenny\u2019s capital in ISC (ii) what about Joan\u2019s proposal to sell ISC shares to the public and (iii) what about Tony\u2019s threat to incorporate a new company,\u00a0<strong>AND<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>(c)\u00a0\u00a0You are Lenny\u2019s solicitor.\u00a0\u00a0From Lenny\u2019s perspective what is the best way or ways to structure Lenny\u2019s capital in ISC.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>minimum 5 pages, write in 1.5or2 space<\/strong><\/p>\n<p><center><a href=\"http:\/\/onlineclassesguru.com\/orders\/ordernow\"><img decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcTyj99p60XCLyLk1htB7-1neRt8-2QdnenNlQ&usqp=CAU\"target=\"_http:\/\/onlineclassesguru.com\/orders\/ordernow\"\/><\/center><p>","protected":false},"excerpt":{"rendered":"<p>Question 1 &nbsp; Joan Smith and Tony Jones \u2013 lifelong friends \u2013 want to start a computer software business.\u00a0\u00a0They are both married and have young children, and their spouses are not working.\u00a0\u00a0Both Joan and Tony have computer expertise and want to be actively involved in the business.\u00a0\u00a0Both are employed by a very large software company&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-30610","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>oan Smith and Tony Jones \u2013 lifelong friends \u2013 want to start a computer software business. 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