10 JanuaryBecome your own boss: 9 essentials for creating a business
Aspiring entrepreneurs don’t lack imagination, quite the contrary. They are dynamic and creative, however, they can be held back by various constraints. As Lex Start previously noted in its last report on the legal industry, financial constraints and the complexity of legal procedures are among the principle obstacles faced by entrepreneurs.
Lex Start aims to simplify legal solutions for entrepreneurs. As such we are here to inform you about all the legal documents you could need during your entrepreneurial journey.
1. The incorporation
A fundamental step in your journey, incorporation marks the birth of your company. Although, it’s not the only legal structure available, it is the most used. After having gone through the incorporation process, your company will be its own legal entity. Its activities, income, spending and profits will be dissociated from yours.This allows you to limit the risk you face while running your company.
As mentioned in a previous article, you can incorporate your business under Quebec’s Business Corporation Act (provincial incorporation) or under Canada’s Business Corporation Act (federal incorporation).
Moreover, incorporating your business will enable you to choose a personalized name for it. Though you can always decide to have a digital name, created by Corporations Canada (if you incorporate your business under Canada’s Business Corporation Act) or by Quebec’s enterprise Register (if you incorporate your business under Quebec’s Business Corporation Act).
When incorporating your business with Lex Start, you can get, as a bonus, a personalized name, your company's article of incorporation and your minute book, essential documents for every corporation.
2. The shareholders' agreement
A corporation is composed of shareholders who contribute, by purchasing shares, to the company’s funding. In return, they usually receive dividends, in other words, a portion of the corporation’s profits (proportionate to the shares they own). Aside from receiving dividends, shareholders can also have other rights related to the company.
As mentionned in a previous article , a shareholders' agreement is like a marriage contract : It’s always better to have one when things are going well!
Thus, in order to set the rules of the game beforehand, the shareholders' agreement circumscribes the rights and obligations the shareholders have towards each other as well as towards the company.
For example, the agreement can plan how disputes will be solved within the company, what procedure a shareholder wishing to sell his shares to a third party should follow or even how and when a shareholder can be excluded from the company.
Lex Start offers you a complete shareholders' agreement and three hours worth of consultation with one of our lawyer partners.
What is a trademark? It consists in a word, a group of words, a logo, a drawing or any other sign that allows a company or an individual to distinguish its products or services from those already on the market.
In other words, a trademark allows your company to be renowned in a particular market. To be protected, a trademark must be registered with Canada’s Office of the Registrar of Trademarks.
First, you’ll have to do a name search for your trademark, which consist in an analysis of the given name in the market. If the result is positive and the name is not already held by another company, you will be able to use this name in your business activity.
Therefore, Lex Start offers you a complete analysis of the name search for your trademark to successfully register your idea .
Once registered, the trademark is protected for a period of 15 years and its owner has the exclusive property, that is to say, that he or she is the only one who can use it. On the contrary, not registering a trademark makes it vulnerable to third parties and competing companies.
Lex Start offers a trademark kit , which allows you to benefit from the expertise of a trademark agent in the preparation of your file.
4. Website documents
In the digital age, business and Internet are deeply linked. Indeed, it is no surprise that most start-ups develop a mobile app or have a page on various social medias. If this is the case of your newly constituted business, you might need terms and conditions for your website or of your mobile app. This document allows you to specify how your website can be used. For example, according to this policy, you may delete hateful or insulting comments published on your website or on your social networks pages.
This document will also allow you to reduce your liability regarding information displayed on your website and on the websites linked to it. Moreover, this document allows you to indicate how personal information you collect from the users of your website or your mobile app will be used. By purchasing our Terms and conditions kit you will receive two hours worth of consultation with one of our partner lawyers.
It is even more important to get legal documents for your website if your company is selling (or will sell) products and services on the Internet. If that is the case, terms of sale may be useful for you. They will plan the terms and conditions of sale, shipping, exchange and reimbursement of your products and services, which is information that businesses must make available pursuant to art. 54.4 of the Consumer Protection Act .
Just like the Terms and conditions kit, the Online sale kit offered by Lex Start includes 2 hours worth of consultation with one of our partner lawyers.
5. Partnership agreement
You’ve heard it time and time again: connections are really important in the business world. Allying yourself with competent people with an expertise in a particular field can be just what your company needs to reach new heights.
Thus, concluding a partnership in which you and your partner provide each other with services may be an excellent idea. However, the terms and conditions of any partnership must be clear and accepted by each one of the parties; this is what a partnership agreement is for.
Essentially, this contract outlines the services that each party will have to provide, the monetary value of these services and the consequences of a failure to execute the contract. A Partnership contract kit will soon be available on Lex Start’s website.
6. Unilateral non-disclosure agreement
Whether it is future business partners or future shareholders, you will meet people interested in your business project. You may even discuss your business model, products or services. Thus, these individuals could have vital information in their hands concerning what makes your business so unique and competitive on the market.
To ensure that this information remains confidential, you could get a unilateral non-disclosure agreement, which will be signed by those future partners, future shareholders or even employees. This agreement will specify which information must be kept confidential and indicate the possible penalties for a violation of the non-disclosure agreement.
Lex Start offers you a non-disclosure agreement kit, which includes two hours worth of consultation with one of our partner lawyers for only 500$!
7. Employment contract/Internship contract
Are you thinking about hiring employees or interns? Great. When and how much will they be paid? How much vacation will they have? Will they have benefits? Will you reimburse the expenses they incur in connection with their work?
An employment contract or internship contract can answer all these questions and more. Drafting such contracts will make sure that employees and interns are aware of their rights and duties relating to their job or internship.
Lex Start offers you two kits: the Employment kit and the Internship Kit. For 500 $, you will get one of these contracts validated by a lawyer.
8. Stock option plan
Do you want your employees to be able to buy shares in your company? If that is the case, building a stock option plan is advised. This plan will specify what types of shares are offered to employees, the conditions that they’ll have to respect in order to be eligible for the plan and the price of the shares that will be proposed to employees. A well-conceived stock option plan prevents misunderstandings.
A Stock option plan kit will soon be available on www.lexstart.ca. It will include a form as well as two hours worth of consultation with a lawyer for 500 $.
9. Service agreement
Whether it be a distributor, a consultant or a Web developer, your company will probably need the services and expertise of other businesses or entrepreneurs. Since they are not your employees, you will not be able to specify the nature of their work in an employment contract. In such a case, you could conclude a service agreement.
Unlike the partnership agreement previously presented, the service agreement regulates a relationship in which only one party provides services. The agreement will regulate the business relationship between the entity or entrepreneur providing the services and your company. It will also explain, among other things, the services to be rendered as well as the consideration paid to the service provider. By purchasing the Service agreement kit , you get, for the same price, the contract and two hours worth of consultation with a lawyer.
You now know the 9 essentials for creating a business!
It is important to note that this is a brief and general presentation of legal documents that start-ups usually need. Obviously, this list might change depending on your business model and the situation of your company.
In order to know exactly what you need, fill out our free online submission and a lawyer will contact you shortly.