Assignment #2

ASSIGNMENT #2 (Due by 9 AM Monday November 21, 2016)

You are a young corporate lawyer at the well-known British Columbia law firm Wie, Haight, Raye & Darr. The firm’s client Gates Williams makes an appointment to meet with you. He arrives at your office with J.O.B. Steves whom he introduces as his partner in a new venture. Mr. Williams asks you to incorporate a new company under the BCBCA.

They tell you that the company is being formed to exploit a potentially highly profitable new business opportunity that has arisen as the result a decision by the Canadian International Development Agency (“CIDA”) an agency of Canada’s Department of External Affairs to invite tenders from private sector companies for contracts to provide services that CIDA wishes to have provided in Guatemala. Mr. Williams mentions that Mr. Steves’ son-in-law is a very senior official at CIDA.

Mr. Williams that the shareholdings in the new company will be as follows:

1. Gates Williams 1000 Class A Voting common shares to be paid for in cash
2. B. Steves 1000 Class A Voting common shares to be paid for in cash
3. Ahn 100 Class A Voting common shares (who is not at the meeting) to be paid for in cash

Mr. Williams asks you whether Wie, Haight, Raye & Darr would take 200 Class A Voting common shares in lieu of fees.

Since Mr. Williams and Mr. Steves are in rather a rush they tell you that the company should have standard form articles along the lines of the model BC Articles, that Mr. Williams will be the sole officer and director of the company and that Mr. Steves will call later with additional instructions and information. Later the same day Mr. Williams (not Mr. Steves) calls and asks you prepare an employment agreement between Mr. Williams as President & CEO, and the new company. The employment agreement will have a term of two years and provide a salary of $500,000 per year.

Please identify briefly any legal or, in the light of the following provisions of the Law Society of BC Code of Professional Conduct, any ethical issues: s. 1.1-1 (definition of “conflict of interest”); s. 3.2-7; s. 3.2-8; s. 3.4-1; s. 3.4-28.

Please answer in three pages or less (one and half spacing). It is not necessary to repeat the facts.