Starting Your New Business Off On The Right Foot
Are you an entrepreneur, or have you recently started up a business? Having your legal affairs properly covered is a critical part of your business success. There are legal considerations that new business start-ups must consider. Make sure that your business doesn’t get caught with unexpected expenses (or even worse) by having these common business startup legal issues dealt with:
Determining the Appropriate Legal Structure and Form for Your New Business
There are more legal structures than just incorporation, and in fact there are many instances (including taxation benefits) where running your business, at least in the initial stages, as a sole proprietor may be beneficial. Also, there are different forms of partnerships that can be created, that may make sense in your business context. A lawyer trained in corporate structuring can help you determine the best legal structure and form for your business.
Organizational Considerations Relating To Incorporation
If it is determined that incorporation is the best structure for you there are important “organizational considerations” in setting up your corporation. For example – jurisdiction, share structure, particularized articles and by-laws, board composition and extra-provincial registration are just a few of the many organizational considerations you will need to discuss with your lawyer.
Creating an Appropriate Capital Structure Aligned With Your Long Term Financing Needs
It is important that your capital structure, in terms of both authorized share capital, and the method that you raise money, is aligned with your long term goals and financial needs. Debt and equity have different legal treatment and it is critical that you get legal advice in determining your optimal structure. Failing to address this for new business start-ups can have negative tax consequences later.
Determining The Need For A Unanimous Shareholder Agreement
A Unanimous Shareholder Agreement is an important agreement that has a material impact on the shareholders of a business. These are not a “one size fits all” agreement and there are many different clauses and factors that come into play, contextual to each business. New business start-ups with more than one investor or person really should have a unanimous shareholder agreement in place. It is important that you speak with a lawyer to understand how these agreements work and whether one is right for your business.
Understanding Corporate Governance and Establishing an Effective Board of Directors
Directors are the “guiding minds” of a business and as such take on certain fiduciary and statutory obligations. The effective composition of your board is critical to the long term success of your business.
The Legal Issues Involved In Adding Employees To The Start-Up
A lawyer will help you draft employment agreements or independent contractor agreements that are unique to your business and also which adhere to the various employment standards, regulations and best practices.
Creating a Successful Employee Incentive Structure
Many start-ups cannot afford to offer a competitive salary to employees. Creative new business start-ups incentivize their employees in other ways. A lawyer can help you to create stock option plans or other incentive mechanisms to help you retain top talent in your start-up.
Effectively Protecting Your Intellectual Property
Your Intellectual Property is a critical party of your business. In some cases, new business start-ups’ intellectual property is its only true asset (other than the person who is behind it) with value. This business start-up legal consideration is a must in these cases. You need to adequately protect it including copyrights, trade secrets, trade names, trademarks, patents, industrial design and other forms of intellectual property.
Creating Effective Agreements That Facilitate Your Business and Protect Your Interests
You will have various revenue sources for your business, each of which will generally include a different contract. Whether it is a User Agreement, a Licensing Agreement, a Service Agreement or Franchise Agreement, or many other types, you need to have it drafted correctly to protect your interests.
Complying with Securities Regulations When Raising Money from Investors
There are a myriad of securities rules, regulations and laws that effect the issuance of shares to investors in a start-up. Most entrepreneurs are not aware of these legal considerations. It is critical that you comply with the securities rules and regulations including the various prospectus and registration exemptions that are available to business start-ups.
Legal Help For New Business Start-ups
The entrepreneurial and start-up business lawyers at Kahane Law Office in Calgary, Alberta are passionate about helping entrepreneurs. We can help you to properly and effectively set up your company to navigate all of these legal considerations and risks to help ensure your continuing success. Call us today at 403-225-8810 or email us directly here.