Canada: Business Start-up

Last Updated: March 15 2016


The new entrepreneur, even if he has previous experience in business as an employee or senior manager or executive of a large corporation, often has little more than a general awareness of legal and tax issues involved in starting up a business. The entrepreneur will be relying on his accountant and lawyer to recommend an appropriate structure and provide advice as to the tax implications.

The client’s accountant may or may not have expertise in tax matters and accordingly it may be necessary for the lawyer to provide this tax input.

Taxation of Different Business Structures

The different tax treatment of different forms of enterprises can be a significant factor in choosing an appropriate business structure. These factors can be as important as liability concerns.

Sole Proprietorship

Since in law there is no legal difference between a sole proprietorship and the individual running it, the tax treatment of a sole proprietorship is that of the individual, even though the sole proprietorship is a distinct accounting entity.

Under the Income Tax Act (the “Act”), a taxpayer, in computing his “income” for a taxation year, is required to include his income for the year from all his businesses and all his property, wherever situated. What is meant by “income” from a business or property in this context is the “profit” therefrom. That is, a taxpayer’s “profit” in the ordinary business and accounting sense is what the taxpayer is required to account for, in the first instance, when reporting his income from business and property. It should be noted in this regard that “income from a property” does not include capital gains or losses arising from the disposition of property. The profit so determined is merely the starting point for the computation of the taxpayer’s income for the year from such sources and is subject to modification by numerous other provisions. Many of these other provisions have the effect of altering the accountancy concept of “profit”.

Because of the difference between the tax treatment accorded employees and that accorded self-employed individuals, the task of determining whether a taxpayer is bound by a contract for “service” (and is an employee) or by a contract for “services” (and is self-employed) has been faced by the Courts in a number cases. In some callings this distinction has been particularly difficult to resolve, a fact nowhere better illustrated than by the large number of appeals involving musicians, actors, entertainers and similar artists. When dealing with such entrepreneurs it is after useful to obtain advice from a tax practitioner.

In most cases involving the question of business versus employment, the issue concerns the deductibility of expenses.

The Courts have held that the profit from a business or property is the surplus by which the receipts from the business or property exceed the expenditures made for the purpose of earning those receipts.

However, such a broadly-stated concept is of little help in determining “profit for the year”. It is now generally accepted that the determination of profit requires the application of recognized accounting principles and the calculation of profit according to the “accrual method”. A distinction, however, must be made between a requirement that income for tax purposes be accounted for generally in conformity with accounting principles and a requirement that the taxpayer’s treatment of financial statements and tax returns be identical. However, this distinction will be more important for a corporation than for sole proprietors.

As a result of changes in the February 27th, 1995 Federal Budget, non-calendar year ends are no longer available for sole proprietorships of for professional corporations. This eliminates the permanent one-year deferral of income which was available to such taxpayers.

Finally, it is important to remember that, unlike corporations, tax on individuals is levied at graduated rates.


General Rules

Business carried on in partnership, although distinct accounting entities, like sole proprietorship do not have a separate legal personality and are not taxpayers as such. The income from partnership must be reported by the partners in their personal capacity.

The Act requires the determination of income at the partnership level which must be computed as though the partnership were a separate person. This requires the partnership to compute its income from various sources, as well as any net capital loss, non-capital loss, firm loss and restricted firm loss, where applicable, for the fiscal period of the partnership. Each partner is then required to recognize his share of the income and loss components in his own tax return.

Each partnership computes its income for tax purposes in accordance with the general rules for computing income under the Act as well as with any specific rules applicable to partnerships. The income of the partnership is determined with respect to its fiscal period.

Nothing in the Act requires the partnership itself to file a prescribed partnership tax return showing the computation of income and allocation thereof among the partners. Statements must nevertheless be prepared by the partnership showing this information in order that each partner may properly report his shares of the partnership income in his own return.

The Regulations provides for the filing of a partnership information return by each member of a partnership that carries on a business in Canada, or that is a Canadian partnership, at any time in the partnership’s fiscal period.

The partnership return to be filed by the partners must contain such information as the income or loss of the partnership, the names of partners, their shares of income or loss of the partnership, etc. Partnerships with five or fewer members are not required to file an annual Partnership Information Return.

Allocation to Partners

The items of income and loss that flow through the partnership to the partners retain their characteristics as to source and nature.

In determining income of loss at the partnership level, capital cost allowance on property owned by the partnership and the various reserves permitted by the Act are claimed by the partnership and not by the partners individually.

Salaries paid by a partnership to its members do not constitute a business expense, but are a method of distributing partnership income among members. The income of a partnership in a taxation year may be less than the salaries which the partnership agreement requires to be paid to the partners. In this event, the excess of the salaries over such income appears as a deduction in the partners’ capital accounts. Such a reduction of the capital of each partner is allowed as a deduction in determining the allocation to him of the income or loss of the partnership.

Where a partnership leases property owned by a partner, the rent is an expense of the partnership and income of the member, and not an allocation of partnership income.

A partnership agreement may required that certain expenses incurred by a member of the partnership, such as automobile expenses and advertising expenses, are to be paid by each member personally. The member may deduct such expenses to the extent that they are incurred in earning the partnership income.

Each taxable capital gain and allowable capital loss resulting from the sale of partnership property will represent a taxable capital gain or allowable capital loss in the partner’s hands. Each partner’s share of the taxable capital gains in the partnership will be added to other taxable capital gains which he has realized from other sources from which he will deduct allowable capital losses realized in the partnership and in respect of the disposition of other capital assets held by the partner, thus arriving at the partner’s net taxable capital gain position or a capital loss carryover position.

If a partnership realizes rental income from real property, the rental income will retain its characteristic in the individual partner’s hands and a particular partner who held other rental properties would aggregate all rental income to determine the maximum capital cost allowance claim available to him in respect of rental buildings which he owned directly. In determining net rental income in the partnership, the partnership will not be entitled to claim capital cost allowance on rental buildings owned by it in excess of the aggregate net rental income of the partnership before such capital cost allowance claims. For this purpose, the rental properties of the partnership are grouped together. If a net rental income position results after claiming capital cost allowance in the partnership, a particular partner can then add his share of that net rental income to other rental income received directly by him or from other partnerships to determined what capital cost allowance, if any, he might claim in respect of rental properties owned directly by him.

Where a partnership reports a loss for the year, that loss is allocated to the partners and used by them to offset against other income or to carry over against income of other years in accordance with the provisions of section 111 of the Act. The partnership itself does not carry the loss over to another year in order to reduce the income reported to the partners for that year. This is a key tax planning point which will be discussed in more detail below under the heading tax planning.

Limited partnerships, which are often used for investment purposes but are sometimes useful as an operating form, are taxed in the same way as general partnerships except that the concept of “at risk” affects the amount of write off which a limited partner can claim. Details are beyond the scope of this paper.

Joint Venture and Co-Ownership

The taxation of joint ventures or co-ownership is a function of their nature in law.

Transactions on joint account or other forms of joint venture are commonplace in commercial practice. Whether or not such transactions amount to partnership may not be a simple determination.

Though co-ownership of property does not, of itself, constitute the joint or common owners partners, the manner in which parties treat items of property used by them in common may, in the presence of other indicators, point to a relation of partnership between them.

A joint venture carried out through corporate form is not distinguished from any other type of corporation. All of the rules discussed below with respect to the taxation of corporations and their shareholders are applicable.

Many joint ventures will, at law, be in effect partnerships and accordingly the rules of partnership taxation set out above are applicable.


General Rules

A corporation is a “person”, and therefore a “taxpayer” in its own right. As is well known, a corporation is a legal entity that is brought into existence by its constating documents and is an entity distinct from its shareholders.

The concept that a corporation is a legal entity separate and distinct from its shareholders gives rise to difficult problems in taxation. Since a corporation is a separate entity, its property, assets and liabilities belong to, or flow from, the corporation. This is so even if there is only one shareholder of the corporation who owns all of its issued and outstanding shares. The “one person company” is no less of a corporation and a separate legal identity than a publicly-held corporation.

The implication of this is that there are 2 stages of taxation where a corporation is involved. The first stage of taxation is at the corporate level and the second stage of taxation is at the shareholder level.

Corporate Taxation

The taxation of corporate income depends upon four principal factors:

  • The type of corporation
  • The source of its income
  • The timing of its distribution to shareholders and
  • The relationship between the corporation and its shareholders

The theoretical federal tax rate for all corporations is 38 % of taxable income. This rate is reduced by an amount equal to 10% of the corporation’s taxable income earned in the year in a province to allow for provincial corporate tax rates. In effect, the basic federal rate of tax on corporate taxable income earned in Canada is 28%.

The purpose of the 10% reduction in the federal corporate tax rate is to open an area of the income tax field to the provinces to allow them to levy their own corporate income taxes. In fact, all of the provinces have entered the tax field, and levy corporate taxes at varying rates. Thus the total tax on corporate taxable income is calculated by adding the applicable provincial rate to the federal rate.

The actual rate of federal tax on corporate income depends upon various factors which can increase or decrease the theoretical rate. For example, some corporations receive tax credits for certain types of income, while surtaxes can raise the effective corporate tax rate above the nominal rate.

The basic federal corporate tax is levied at a flat rate, that is it is applied at a uniform rate to the corporation’s taxable income. Because the tax is applied at a flat rate, the average rate of tax paid by a corporation is usually the same as its marginal rate. Thus, with some exceptions, that are discussed below, the rate of tax paid by a corporation on its “top dollar” is the same as the rate paid on its first dollar of taxable income. The characteristic of the corporate tax structure is extremely important when considering the interplay between the tax paid by a corporation and the tax paid by its individual shareholders. It might, for example, influence the decision as to how much an owner-manager should extract from a corporation by way of salary (that is deductible to the corporation) or dividends (that are not deductible) and taxable to the individual at the progressive marginal rates discussed above.

Having said that corporate tax is levied at a flat rate, it is important to note that there are, in fact, several different flat rates. The rate applicable to a particular corporation depends upon the type of corporation, the amount that it earns in the year, the source and type of its income, and its shareholdings. Each of these factors plays a role in determining the rate at which a corporation is taxable.

Taxation of Dividends

When a corporation pays dividends, its shareholders will generally be liable for tax on their dividend income. The taxation of shareholders depends upon the following:

  • Type of shareholders (corporate or individual)
  • Status (Canadian or foreign) of the payor corporation
  • Size of shareholdings (controlling shareholder or portfolio investor)
  • Type of dividend (taxable or capital) and
  • Source of income from which the dividend is paid (active or passive).

One of the complicating features of the corporate tax system is the potential for double taxation of income in the corporation and again in the hands of its shareholders. The act does, however, provide some relief from double taxation in certain situations. For example, dividends between taxable Canadian corporations flow through on a tax-free basis. Individuals who receive dividends from taxable Canadian corporations are entitled to a dividend tax credit, which reduces the net tax rate on such income.

Whether the relief from double taxation of corporate income is complete or partial depends upon the status of the payer corporation and the source and amount of its income. Generally, the tax system is most generous to shareholders of “small” Canadian corporations engaged in active business. Shareholders of “large” or non-Canadian corporations are subject to some double taxation.

The Canadian tax system is largely integrated with respect to annual active business income of up to $200,000 earned by a Canadian-controlled private corporation and paid to its individual Canadian shareholder. In such a case the total tax burden incurred by the corporation and the shareholder is approximately the same as the tax which would be incurred by the individual if he earned the active income directly through a sole proprietorship. However, it is important to note, as set out in more detail in the tax planning section below, that a potential for deferral of taxation exists in this situation.

Business Start-Up Tax Planning

One of the key points to consider in a business start-up situation is whether profits or losses are projected in the start-up phase.

If losses are anticipated, ignoring liability concerns, a corporation is not the best legal structure to use.

Any losses incurred by the corporation remain in the corporation and cannot be directly accessed by the principals of the business. In other words such losses cannot be used by the entrepreneur to offset other sources of income.

From a tax planning point of view a proprietorship or partnership is preferable in these circumstances. Any losses incurred can directly be utilized by the entrepreneur.

The corollary to this loss utilization is that the entrepreneur has personal liability for any debts incurred. Some protection can be provided by the use of a corporation which acts as a bare trustee, pursuant to a written agreement, on behalf of the entrepreneur. Although there is a risk that the Courts may pierce the corporate veil and fix liability directly on the owner, there is nevertheless one barrier which provides protection. Such bare trust corporations are mere conduits for tax purposes and any income or loss is taxed directly in the hands of the beneficiary.

If profits are anticipated then an analysis of the projected tax burden if the income were earned personally and if the income were earned through a corporation should be performed by the entrepreneur’s accountant.

It is also important in making this analysis to remember that active business income of up to $200,000 earned by a Canadian-controlled private corporation is subject to a low rate of taxation. Therefore any income in excess of this amount should be paid out by way of salary or bonus to reduce corporate taxable income to this level.

This initial stage of taxation in the corporation is less than the top marginal tax rate applicable to individuals. Therefore to the extent that the funds are not required by the entrepreneur for personal consumption and can be left in the corporation, a deferral of tax will be available. This deferral is enjoyed until such time as dividends are paid to the shareholder and taxed in the shareholder’s hands. At that time the second stage of taxation, the dividend in the shareholders hands, is incurred, whereupon the total tax burden on the income is the same as if it had been earned by the individual directly, but a deferral of part of the tax has been enjoyed.

With respect to passive (investment) income, there is basically no deferral possible through the use of a corporation.

Tax Planning - Acquisition of Business

When advising an entrepreneur who is acquiring an existing business rather than starting up a new business, the invariable question is whether shares or assets should be acquired. Although the general rule of thumb is that vendors wish to sell shares and purchasers wish to acquire assets, the specifics of the taxation of each and the details of the transaction should be examined.

Business Tax Planning - Purchase of Shares

Tax Effect on Purchaser

On a purchase of shares the entire purchase price paid by the purchaser to the vendor is allocated to the shares. In other words, the underlying tax values of the assets in the corporation remain unchanged.

The acquired shares will normally be capital property of the purchaser. The Act prohibits the deduction of any payment on account of capital when computing income from a business or property. Further, the Act excludes from the definition of “eligible capital expenditure” the cost, or any part of the cost, of acquiring tangible property. Therefore no part of the price paid for the business qualifies for deduction from income even if the price paid for the business was arrived at with reference to the “goodwill” of the underlying business of the corporation.

In an arm’s length transaction, therefore, the purchaser’s cost base for the acquired shares would equal the price paid for the shares plus any reasonable fees and expenses of acquiring the shares.

The Act permits a taxpayer to deduct amounts paid or payable in the year, pursuant to a legal obligation, as interest on an amount borrowed for the purpose of gaining or producing income from the property or business acquired. Note that the interest must be paid or payable pursuant to a legal obligation. This means it must be paid in respect of an obligation under which the taxpayer is bound and in respect of which payment may be made the object of legal recourse by the creditor. Note as well that the deduction is limited by the general provision that the amount of interest must be reasonable.

Business Tax Effect on Corporation

Although generally speaking the tax status of the corporation is unaffected by a share purchase, there are certain exceptions.

A change in control triggers a new year end. This means that the corporation must prepare financial statements and file tax returns at that time.

The other major effect on a change of control is with respect to a corporation’s loss carry forward, which is to say the losses previously incurred by the corporation which can normally be used to offset similar income in other years.

Net capital loss is the amount of a taxpayer’s allowable capital losses for the year that can be carried over to other years to be deducted in arriving at taxable income. Generally speaking the Act permits net capital losses to be carried forward indefinitely and to be carried back one year. In the case of a corporation, the carry-over of losses is limited to the corporation’s net capital gains in the year. However, there are limitations in situations where control of the corporation that has sustained the loss is acquired by a person or persons who did not control the corporation at the end of the preceding year. In such circumstances, net capital losses for preceding years and the year in which the change in control occurs may not be deducted. Therefore when control of a corporation changes hands, its unused net capital losses that are available from previous taxation years cannot be employed by the corporation in the year in which the change took place, or in any subsequent year.

The Act also generally permits non-capital losses to be carried forward seven years and back three years. This is qualified however when there is a change in control of a corporation, non-capital losses of the corporation are deductible only if the loss business is carried on for profit or with a reasonable expectation of profit for the year in which control changed and for future years in which the loss will be deducted. Losses incurred prior to the change of control may then be deducted pursuant to certain limitations.

Since all liabilities of the corporation remain with the corporation, this of course includes tax liabilities. It is therefore important to ensure that all potential tax liabilities have been determined.

Certain liabilities might arise as a result of the sale of the business. For example if there is any debt forgiveness of amounts owing by the corporation to the shareholder, this would have negative tax implications to the corporation. The same is also true of any other debt of the corporation which is forgiven by any other person.

Negotiating Purchase Price

It should be remembered that the sale of shares gives rise, in most circumstances, to a capital gain to the vendor. The vendor may have a capital gains exemption of up to $500,000 available to him on the sale of the shares of a qualifying small business corporation. Even if this capital gains exemption is unavailable, only 3/4 of a capital gain is taxable. Knowledge of the vendor’s tax situation is important to the entrepreneur in negotiating the final purchase price.

In many cases it will be desirable both from the point of view of the purchaser and the vendor to have the vendor available to assist in the initial operation of the business by the purchaser. In those circumstances, the vendor may accept a lower price for the business if an attractive consulting arrangement is arrived at.

From a tax point of view, this arrangement is desirable for the purchaser since the consulting payments will be deductible to the corporation which makes the payments as long as the payment is reasonable in relation to the services actually performed. On the other hand, the vendor will be fully taxable on the consulting payments received.

If the quantum of the consulting fee is not reasonable, then not only will a portion of the consulting payment be non-deductible to the corporation paying it, but, there is a risk that the payment could be considered disguised sale proceeds. In that case the purchaser may have an income inclusion for the excessive payment on the basis that the corporation has conferred a benefit on the shareholder by paying the consulting fee and thereby reducing the purchase price.

It is also very important to remember that while a reserve is available to a vendor where a portion of the purchase price is to be paid over a period of time, the Act requires that a minimum of 1/5 of the proceeds be brought into income in every year. Accordingly a transaction which a purchaser would like to structure in such a way that payments take more than 5 years, or less than 1/5 of the proceeds are paid each year, will result in a tax liability to the vendor which he may not have the cash flow to pay. Accordingly any such structure is unrealistic and the entrepreneur should be so advised.

The Act has a provision which generally provides that payments that are dependant on production or use are normally included in income. However, Revenue Canada has taken the administrative position that they will not apply the income inclusion provisions if the following conditions apply:

  • The vendor and purchaser are dealing with each other at arm’s length
  • The gain or loss on the sale is clearly of a capital nature
  • Tt is reasonable to assume that the earnout feature relates to goodwill the value of which cannot reasonably be expected to be agreed upon by the vendor and purchaser at the date of the sale
  • The duration of the sale agreement does not exceed five years and
  • The vendor submits, with the income return for the year in which the shares were disposed of, a copy of the sale agreement. Also submitted with that return is a letter requesting the application of the cost recovery method to the sale, and an undertaking to follow the procedure of reporting the gain or loss on the sale under the cost recovery method as outlined in the Interpretation Bulletin.

It is therefore important for the purchaser to be properly informed of the tax implications to this structure.

Business Tax Planning – Asset Purchase

An asset purchase is more complicated from a corporate point of view than a share purchase is. The same is true of the tax considerations. In effect, each asset being acquired, including intangible assets, has its own tax treatment.

There are two tax considerations arising out of a purchase and sale of assets. The first is the allocation of the purchase price to the assets of the business. The second is the allocation of the consideration among the assets of the business.

Allocation of Purchase Price

The allocation of the purchase price among the various assets of the business is one of the most important tax considerations. The vendor’s objective will be to minimize its tax liabilities in the year of sale. The vendor will wish to allocate the purchase price to assets which five rise to either no income or income which is subject to tax at reduced rates. The vendor’s preference will be to allocate the purchase price to assets in the following order:

  • Non-depreciable capital property. Three quarters of any gain will be included in income.
  • Depreciable capital property where there will be little or no recapture of capital cost allowance.
  • Eligible capital property. Only 3/4 of the sales proceeds will be deducted from the cumulative eligible capital and any excess will be included in income.
  • Depreciable capital property where there will be recapture of capital cost allowance. Inventory and other assets which will give rise to a full income inclusion.

The purchaser will wish to allocate the purchase price to assets in respect of which there will be the maximum deduction available for tax purposes in the years subsequent to the year of sale. The purchaser’s preference will be to allocate the purchase price to assets in the following order:

  • Inventory.
  • Depreciable capital property, particularly depreciable capital property in respect of which there is a high rate of capital cost allowance.
  • Eligible capital property.
  • Depreciable capital property where there is a very low rate of CCA.
  • Non-depreciable capital property.

As noted above, the vendor and purchaser will often have conflicting interests and the allocation may require negotiation. It is for this reason that Revenue Canada will typically accept the allocation reached by the parties, provided that there is evidence that the transaction is a negotiated one.

Where the parties do not have conflicting interests (for example, where one party is exempt from tax) or where the parties report the transaction on a different basis for tax purposes, Revenue Canada may invoke the Act and set aside the allocation.

Often an agreement of purchase and sale will provide that the parties to the agreement accept the reasonableness of the allocation and agree to file their respective appropriate income tax returns using the agreed allocation. This will ensure that the negotiated allocation will actually be used by the parties and minimize the risk that Revenue Canada will challenge the allocation.

Tax Implications - Allocation of Consideration

Careful allocation of the consideration may reduce the taxes payable by the vendor in the year of sale without affecting the taxes payable by the purchaser. Where the consideration includes vendor-take-back debt, provided the debt is not due until a year that is after the year of sale, the vendor may be entitled to a reserve. A reserve is available in respect of capital property and inventory, provided certain conditions are met.

It is quite usual that inventory be sold at book value and accordingly any income tax consequences are minimal. The Act provides that any gain or loss arising on the sale of inventory will be on income account rather than on capital account.

From the purchaser’s point of view, the portion of the purchase price allocated to inventory will be deductible when the inventory is sold.

Since inventory is normally purchased for resale, it is usually exempt from provincial retail sales tax.

The sale of inventory is a taxable supply with the result that, absent a rollover, G.S.T. will be payable.

Capital properties are divided between depreciable assets such as buildings and non-depreciable assets such as land.

The portion of the purchase price which is allocated to the building may be deducted at the rate of 4% per year on a declining-balance basis.

There is no immediate tax relief to the purchaser in respect of the portion of the purchase price which is allocated to the land. The portion of the purchase price which is allocated to the land is added to the adjusted cost base of the land to the purchaser. The adjusted cost base is relevant to determining the capital gain (or loss) that will be realized by the purchaser on a subsequent sale of the building.

When real property is included in an asset purchase, Ontario land transfer tax is payable on the portion of the purchase price allocated to real property (both land and building).

The sale of real estate is a taxable supply with the result that, absent a rollover, G.S.T. will be payable.

For income tax purposes, depreciable assets such as machinery, equipment, computers, vehicles or leasehold improvements are a type of capital asset whose cost may be deducted over time. They may be depreciated at different rates.

Goodwill is generally described as the basket of intangible assets which add value to a business. Examples would include its customer list, the location of its premises, its mailing list, its business names and phone numbers and generally the value and goodwill built up as a result of years of carrying on business. From a tax and accounting point of view, it is the price over and above the specific tangible assets which a purchaser is prepared to pay in order to acquire the business.

Goodwill and other intangible assets connected with a business which are not listed in one of the capital cost allowance classes are generally classified under the Act as “eligible capital property”. Other examples of eligible capital property are legal costs on incorporation, licenses for an unlimited period and payment for non-competition clauses.

The tax treatment of eligible capital property is similar to that of depreciable property, but there are some differences. For example, although the cost of eligible capital property can be deducted over time, only 3/4 of the cost may be deducted at the rate of 7% on a declining-balance basis.

As well, 75% of the gain is included in income of the vendor. If the vendor is a private corporation, a portion of the purchase price allocated to eligible capital property is added to the corporation’s capital dividend account.

Similarly, only 3/4 of the cost of eligible capital property can be deducted by the purchaser and this is at the rate of 7% on a declining-balance basis.

The information is thought to be current to date of posting. Income tax law changes frequently and content may no longer reflect the current state of the law. This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions