An EIN is a unique nine-digit number assigned to your company by the IRS and used for bank account opening, tax filing, hiring and reporting purposes. There are four main methods to obtain an EIN, each one posing its own complications for Canadian and foreign companies.

1. Online

The easiest approach, online, is unfortunately not available to most Canadian and foreign companies as it requires a personal US taxpayer ID number and a US-based address. If you use this method, we suggest you screenshot or print out the confirmation page as you will not receive any additional confirmation from the IRS of your EIN until they mail the EIN confirmation letter 3-6 weeks later.

2. Fax

This is sometimes the best method to use for Canadian and foreign based EIN filers. Simply fill out the SS-4 form and fax it to the correct number (depends on the state of incorporation). The processing time for fax applications can be anywhere from 4 business days to 3 weeks and sometimes requires a follow-up phone call in order to receive confirmation of the EIN. This is typically the preferred method as it does not require a US taxpayer ID number or US address for the filer.

3. Mail

This method is the simplest method, if you have the time. Simply fill out the SS-4 form and mail it in, taking 4-6 weeks before receiving the EIN in the mail. The biggest problem we see with our clients using this method is that, if there is a mistake in the filing, this method takes the longest to receive notice of the mistake and to subsequently correct.

4. Telephone

The IRS currently has a special EIN phone number for international businesses. While this method often results in the shortest processing time (sometimes the EIN is provided on the call), it usually doesn’t work for US-domiciled companies as this number is not meant for US-domiciled companies. US-domiciled companies are meant to call the US-domiciled business number, but this number doesn’t work outside the US.

There are ways to speed this process up, in addition to the above. If you need help applying for an EIN, please feel free to reach out to Voyer Law and we would be glad to assist with the speedy issuance of an EIN for your company.

We are often approached with questions about non-compete clauses in the context of employment agreements and independent contractor agreements and asked whether or not the clause is enforceable in Canada or the US. While the enforceability of a non-compete clause is determined on a case-by-case basis, we thought it beneficial to provide an overview of common questions we receive:

1. Are non-compete clauses enforceable?  In many jurisdictions, yes, if drafted correctly. However, courts are always on the lookout for reasons to invalidate non-compete clauses. Indeed, in some US states, including California, non-compete clauses are effectively unenforceable.  California courts will even invalidate employment agreements from other states if the employee is now working in California for a competitor.  Elsewhere in the US, you typically need a legitimate business interest to ensure an enforceable non-compete clause.  In Canada, courts will ask a similar question of whether the company has a proprietary interest worthy of protection. 
2. What interest is worthy of protection? In both the US and Canada, the analysis is similar.  Courts will ask if a company is protecting trade secrets, confidential information, trade connections or goodwill through the non-compete clause.  If a company is simply trying to prevent competition, the non-compete will likely be unenforceable.
3. What about independent contractor agreements?  It is possible to apply non-compete clauses to independent contractors but there is a much higher likelihood that such a clause is unenforceable. Additionally, the likelihood that a contractor will agree to a non-compete is significantly lower as contractors are working multiple jobs at the same time and signing a non-compete clause may cause them to lose out on work.  Finally, some courts may interpret the non-compete clause as indicating an employer-employee relationship, which may lead to material labor law issues.
4. What is a reasonable non-compete?  A company cannot have a non-compete that stops an employee from working entirely except in extreme circumstances, which usually involves a large severance package (for example, applied to a CEO).  Typically, a company needs to limit any non-compete clause by length of time, geographic location and type of work prohibited and to tailor these limits very specifically to the work that a company actually does. 
5. What about a non-solicit or non-disclosure clause  In Canada, and some other jurisdictions, courts will invalidate a non-compete clause if there are other less restrictive means to enforce company goals.  Often a non-solicitation clause or a confidentiality/non-disclosure clause will operate to accomplish the same objective.

By keeping the above in mind, you should be able to avoid the pitfalls of unenforceable non-competes or avoid them entirely through other clauses.

We are often engaged to review Privacy Policies from a U.S. and Canadian legal perspective.  In many cases these Privacy Policies were drafted by Canadian counsel without considering the laws of the client’s major market, the U.S.  The privacy laws of Canada and the U.S. are quite different and a failure to comply with U.S. privacy law can have enormous financial implications.  Accordingly, it is critical that Canadian companies ensure that their Privacy Policies are compliant on both sides of the border.

Below we detail three common privacy law issues that Canadian companies have when entering the US market.

1. The US is far bigger and more complex than Canada

In Canada, with a couple of exceptions, the Personal Information Protection and Electronic Documents Act (PIPEDA) covers most privacy law issues in the commercial sphere.  Conversely, in the U.S., companies must comply with several different federal privacy laws, as well as state laws, the latter playing a major role in privacy protection.  This means that companies need to worry about complying with the privacy laws of all 50 states as well as several federal laws.

2. Same words, different meanings

Although both countries write their laws in English (In Canada – en Français aussi), words can have varying meanings under the law.  In privacy law in particular, certain key concepts are very different between Canadian and U.S. privacy laws, and companies that ignore these differences open themselves up to huge liability.

For example, the term personal information, at the core of privacy law in both countries, has different meanings in both countries and in the US there is no standard definition from one law to the next, or one state to the next. This means that while you might be compliant in Canada with the current way that you collect data from customers, the exact same data collection practice may be non-compliant in the US.

Other major privacy law concepts that differ in the US include: privacy of children under 13 years old, standards for “consent” and “breach”, rules for third-party access to personal information and jurisdiction issues.

3. Fines are far greater in the US

The price to pay for not complying with US privacy laws is far greater than not complying with Canadian privacy laws. For example, the Office of the Privacy Commissioner of Canada (OPC), the Canadian privacy law enforcement body, does not have the authority to fine companies for most privacy law violations.

In the US, by contrast, recent fines imposed by the Federal Trade Commission (FTC) and sister body, the Federal Communications Commission (FCC), consistently are in the million-dollar range and even up to $25 million in some cases.  Even simple violations such as gathering temporary personal information of children prior to getting parental consent can garner fines of up to a million dollars.  And be aware, the first piece of evidence that the FTC will use to see if a company is complying with US privacy law, is its online privacy policy. If you haven’t changed your privacy policy from a Canadian law compliant privacy policy to a cross-border compliant privacy policy, you are putting your company at huge risk.

Canada’s population is 1/10 that of the U.S.  For business, this means that most Canadian companies are going to look to the U.S. for revenue generation and in the process create exposure to U.S. laws, including privacy laws.  It’s critical that companies stay on top of their exposure to U.S. laws and engage legal counsel to ensure that their operations are fully compliant.