Aspiring entrepreneurs have no shortage of business ideas – quite the contrary. Dynamic and creative, they can be held back by difficulties of many kinds, such as financial constraints and the complexity of legal procedures. Lexstart aims to make legal procedures easier for entrepreneurs. In this article, we present and explain the essential documents you’ll need to starting your business.
1. Incorporation
Incorporation, also known as constitution, is a crucial step in bringing your company into existence. Admittedly, this is not the only possible legal status. It is, however, one of the most frequently used. After completing this process, your company has a legal personality distinct from your own. It is a legal entity, whereas you are a natural person. Its activities, revenues, expenses and profits will be separate from yours. This limits the risks to which you personally are exposed. The incorporation process can be carried out under the Quebec Business Corporations Act (provincial incorporation) or under the Canada Business Corporations Act (federal incorporation).
What’s more, during the incorporation process, you’ll be able to designate a personalized name for your newly-formed company. You can also decide to use a numeric name, which will be chosen by Corporations Canada (if you’re incorporating under Canadian law) or by the Registraire des entreprises (if you’re incorporating under Quebec law). By incorporating with Lexstart, you can obtain your articles of incorporation and minute book in just a few clicks.
2. The shareholders' agreement
A joint-stock company is made up of shareholders who, by purchasing shares, contribute to the financing of your company and are its owners. When the company starts trading, they may receive dividends, or in principle, a share (in proportion to the shares they hold) of the profits generated by the company, all validated by an accountant. Shareholders may also have other rights relating to the company.
A shareholders’ agreement is like a marriage contract: it’s better to have one when everything’s still going well! In order to establish the rules of the game in advance, a shareholders’ agreement sets out the rights and obligations that a shareholder has towards the shareholder body as a whole, as well as towards the company. For example, you can stipulate how conflicts are to be resolved when a dispute arises between shareholders, the procedure to be followed when a shareholder wishes to sell his or her shares to a third party, and the conditions required for a shareholder to be excluded from the company. Lexstart offers you a low-cost solution.
3. Trademarks
What is a trademark? A trademark is a word, group of words, logo, design or other sign that enables a company or individual to distinguish its products or services from those already on the market. In other words, a trademark allows your company to be recognized in a given market. To be protected, a trademark must be registered with the Canadian Trade-marks Office (CIPO). First of all, you’ll need to make sure that the name you want to use for your trademark isn’t being used by another company in the same field of activity as yours. To do this, you need to carry out an analysis of the names already in use on the market.
To save you the trouble, Lexstart can carry out the entire search and then successfully register your trademark. Once registered, a trademark is protected for a period of 15 years in the chosen country, and its holder has exclusive ownership, i.e. is the only one entitled to use it. On the other hand, failure to register a trademark exposes it to use by third parties and even competing companies. Lexstart offers you the trademark filing service, which enables you to benefit from the expertise of a trademark agent in preparing the file required for registration, so that you can file a complete file with CIPO.
4. Your website documents
If you’re launching a mobile application, website or social networking page, you’ll need terms of use for your website or mobile application. This document will enable you to specify the use that may be made of your website by your customers and by your visitors in general. For example, under this policy, you’ll be able to remove hateful or offensive comments posted by visitors to your site or social media channels. This document will also enable you to limit your responsibility with regard to the information posted on your Web site and on the sites to which you refer. You’ll also be able to indicate how you intend to use the personal information collected about your customers and users of your website or mobile application, this being a legal obligation arising from Bill 25 now in force. Lexstart offers you its Terms and Conditions kit.
If your website or application allows the purchase of products or services, it’s also essential to have terms and conditions of sale. These are based on your business model and will set out the terms and conditions of sale, delivery, returns, exchanges, warranties and refunds for your products and services, information that companies must make available under section 54.4 of the Consumer Protection Act.
5. The unilateral confidentiality agreement
Whether they’re future business partners or shareholders, you can talk to people who want to contribute to your business project. You may talk to them about your business model, products or services. As a result, they may hold in their hands valuable information about what makes your company unique and competitive in the marketplace. To protect this information and ensure it remains confidential, you can draw up a unilateral confidentiality agreement, which you’ll need to have signed by, among others, your future partners and shareholders. This agreement enables you to specifically designate the information you wish to remain confidential, and to indicate the sanctions facing the other party who acts in breach of the confidentiality agreement. Lexstart offers you a Confidentiality Agreement, including drafting and validation by a lawyer.
6. The employment or internship agreement
Thinking of hiring employees or trainees? That’s great! How much will they earn? What vacations will they be entitled to? Are they eligible for certain benefits? Will you reimburse any expenses they incur in the course of their employment? These are all questions that can be clarified in an employment contract or internship contract. Having such contracts in place in advance will ensure that your employees and trainees are aware of their rights and obligations under their employment or internship. Lexstart offers you an employment contract, in compliance with Quebec’s Act respecting Labour Standards, and an internship contract. Please note that the law governing employment contracts depends on your employee’s place of residence.
7. Le contrat de service
Whether it’s with a distributor, a consultant or a Web developer, your company will probably need to call on the services and expertise of other companies or self-employed workers. Since they are not your employees, you will not be able to detail the nature and terms of the work they will be required to perform in an employment contract. In such cases, you can enter into a service contract with them. Unlike the partnership contract described above, the service contract governs a relationship in which only one of the parties provides services. It governs the business relationship between the entity or self-employed person providing the service and your company. The contract will explain, among other things, the services to be rendered and the remuneration to be paid to the service provider, and will deal with intellectual property.
On the other hand, your company may offer services to customers. You must also take into account the type of clientele you serve, since if your customers are individuals (natural persons) purchasing your services on a personal basis, you must comply with the Consumer Protection Act (CPA). You can consult the Office de la protection du consommateur for more information. When you do business with other companies or self-employed individuals purchasing your services for professional reasons, please note that the terms and conditions that may be included in your contract are more flexible, since the CPA does not apply, but certain constraints may nevertheless be applicable, depending on your field of activity.
8. Sexual harassment prevention policy
In order to prevent sexual harassment in the workplace, it is essential that companies have clear, structured policies to protect their employees and prevent such behavior. A sexual harassment prevention policy includes several key elements: a clear definition of sexual harassment and inappropriate behavior, accessible and confidential procedures for reporting any incident, and investigation and response measures that respect both the confidentiality of those concerned and the principles of fairness.
Conclusion
You are now familiar with the 8 essentials of business start-up. It’s important to emphasize that this is a brief, general presentation of the legal documents normally required by a start-up company, not a legal consultation. This list may change depending on your business model and personal situation. To find out exactly what you need, contact us by clicking here.
