Escrow Agreement Seminar

Size: px

Start display at page:

Download "Escrow Agreement Seminar"

Sherman Powers
5 years ago
Views:

1 Escrow Agreement Seminar

2 Important Definitions Business (d) Business Portion (f) Commencement date (i) Deposit (j) Eligible Business (k) Investment (m) Eligible operating expenses (p) Residency Portion (t)

3 General Agreement Section B, C & D Make Equity investment of $150,000. Escrow Deposit of $150,000 held by IIDI. Deposit is allocated as: $100,000 business portion $50,000 residency portion

4 Terms & Conditions Section 4iii, 5b, c, d & e Progress Reports, submitted upon request typically every 6 months. Must make investment within 2 years from landing in PEI. $75,000 in eligible operating expenses in 12 months from commencement date. Maintain investment for continuous period. Cannot transfer voting control of company.

5 Active & Ongoing Management Section 6 Maintain residence on PEI for 12 months Minimum 183 days physically on PEI Documents to support claim of active and ongoing management

6 Deposit Section 8 Business portion refunded 12 months after commencement date Residency $25,000 after 6 months $25,000 after 12 months Application for refund must be made in writing. Applicants are sent reminder letters.

7 General Provisions Section 11 & 12 Must keep contact information with our office current. Escrow cannot be used as security for loans etc. until refunded.

8 Schedules Schedule A Eligible Business Schedule B Business Plan Schedule D Investment Agreement Schedule E Active and Ongoing Management Schedule F Purchase and Sale Agreement

9 Main Terms and Conditions of Agreement Investment in company located on PEI of a minimum of $150,000 Operating Expenses ($75,000) Resident of PEI Active in ongoing management of company 12 consecutive months of operations.

10 Eligible Expenses (Examples) Rent Heat Utilities Travel outside the country under $10,000 Wages non arms length are ineligible Wage related expenses Canada Pension Plan, Employment Insurance, taxes, Workers Compensation Advertising and marketing costs Professional fees (Accounting, legal, memberships, etc.) Office supplies such as paper, pens etc. Insurance Software purchases Bank Charges and interest Lease Payments * All expenses should be discussed with your accountant. An expense can be eligible but not advisable.

11 Ineligible Expense (Examples) Personal vehicle expenses Capital expenditures Amortization/depreciation Wages for principal applicant and spouse and any other non-arms length wages. Cost of Good Sold Freight Inventory Any repairs or maintenance done to products to increase incremental value. * All expenses should be discussed with your accountant. An expense can be eligible but not advisable.

12 Coffee Break

13 Progress Reports Submitted upon request. Usually every 6 months. Types of activity office is looking for: Language Training Participation in PEI Connectors events. Performance of market research and competitive analysis. Attendance of chamber mixers. Business activity such as registering business, securing business location, hire staff, secure supply chain, applying for licenses and permits.

14 Professional Services Needed Lawyers Incorporating business Share subscription agreement, if investing other legal documents Accountants Revising business plan Valuation of business, if purchasing Accounting/bookkeeping services Preparation of year-end financial statements to a minimum review engagement standard Advise regarding expenses

15 Steps in Opening a New Business Perform Market Research/Research market competition. If changing business concept contact our office. Incorporate business. Open Bank Account in company name and make minimum investment. Perform pre-opening activities such as: find location secure Inventory hire Staff set-up bookkeeping system Inform Office of Immigration of business commencement date.

16 Steps to Buying a Business 100% Ownership 1. Search for businesses for sale with accounting firms, business brokers or real estate agents. 2. Once business found, contact our office. 3. Have professional accountant provide valuation of the business. 4. Obtain Lawyer, enter negotiations for purchase and sale of business. 5. Provide the Office of Immigration with all relevant documents as well as the commencement date. 6. Operate business. * Please note that when purchasing an existing business that the business must NOT have received an investment through the PNP program in the last 48 months.

17 Steps to Investing in a Business 1. Search for businesses seeking investment with accounting firms or PEI Connectors. 2. Once business found, contact our office. 3. Have professional accountant provide valuation of the business. 4. Obtain lawyer, enter negotiations for shareholders agreement. 5. Provide the Office of Immigration with all relevant documents as well as the commencement date. 6. Make investment. Please note that when purchasing an existing business that the business must NOT have received an investment through the PNP program in the last 48 months.

18 Innovation PEI For more information on any programs available through Innovation PEI please contact: Melissa MacLaren or visit

19 PEI Connectors Provide information sessions, seminars, networking sessions and community outreach tours to newcomers. Assist in learning about PEI s business environment. Register for free.

20 Street Address: 94 Euston Street, 2 nd Floor, Charlottetown, Prince Edward Island C1A 1W4 Mailing Address: PO Box 1176, Charlottetown, Prince Edward Island C1A 7M8 Tel: Fax: Website: immigratepei@gov.pe.ca

CANADA - PRINCE EDWARD ISLAND AGREEMENT ON THE TRANSFER OF FEDERAL GAS TAX REVENUES UNDER THE NEW DEAL FOR CITIES AND C0MMUNITIES

CANADA - PRINCE EDWARD ISLAND AGREEMENT ON THE TRANSFER OF FEDERAL GAS TAX REVENUES UNDER THE NEW DEAL FOR CITIES AND C0MMUNITIES 2005-2015 BACKGROUND CAPACITY BUILDING FUND GUIDELINES AND CRITERIA On