Frequently Asked Questions

Welcome to our FAQ page, where you can find answers to the most common questions about our services. We’re here to help you better understand Lexstart and make launching a business clearer and more accessible.

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FAQ

Answers to your frequently asked questions.

What does the incorporation process with Lexstart look like in practice?

You complete the smart online form in 15 to 20 minutes. It guides you step by step: structure type, company name (with real-time REQ and NUANS verification), directors, share capital. Once payment is completed, the team prepares and files the documents. You receive the articles of incorporation, organizational resolutions, share certificates, and minute book within an average of 5 business days.

Is the Terms of Use template suitable for all platforms?

The template is designed to cover most websites and digital services. It remains a standard document that may require adjustments depending on your business.

What services does Barricad Fiscalistes offer?

Barricad Fiscalistes supports businesses and entrepreneurs in tax planning, corporate reorganizations, compensation structure optimization, real estate taxation, succession planning, and business valuation. The team consists of tax specialists and accountants with expertise in Quebec SME realities.

What is the relationship between Lexstart and Barricad?

Lexstart is the online legal platform of Barricad Avocats, a firm recognized in Quebec in corporate law. Barricad Fiscalistes, a complementary entity, covers taxation, financial planning, and business valuation. Together, they form a complete ecosystem: Lexstart handles standard online procedures, while Barricad Avocats and Barricad Fiscalistes manage complex or custom situations.

Does Lexstart only file with the REQ or also handle internal corporate compliance?

Lexstart handles provincial and federal corporate filings, the annual REQ update, and simple annual resolutions. For more complex internal compliance matters, such as share restructuring or in-depth minute book updates, Barricad Avocats takes over depending on the situation.

How do I properly dissolve a corporation in Quebec or Canada?

Dissolution requires settling all debts, filing final tax returns, and closing government accounts. Once completed, articles of dissolution must be filed with the appropriate registry. Professional accounting guidance is strongly recommended to ensure compliant closure.

How should a startup structure its share capital in Quebec?

A startup's share capital should be structured according to its growth vision, potential investors, and founders' tax planning. A flexible structure allows multiple share classes (common, preferred, voting, non-voting) with distinct rights. This approach simplifies fundraising, protects founders, and allows future share issuances without repeatedly amending the articles.

Can I issue shares to an investor after incorporation?

Yes. A corporation may issue new shares if its authorized share capital allows it. Issuing shares usually requires a board resolution and updating corporate records. Proper planning at incorporation reduces the need for costly amendments later.

When should I have my General Terms of Sale customized?

Customization is recommended if you operate a complex e-commerce business, sell internationally, offer subscriptions, or have specific refund policies. A legal mandate can be opened with Barricad Avocats.

Does Lexstart help with opening a bank account after incorporation?

Lexstart does not directly handle bank account openings, but refers clients to the National Bank of Canada (BNC), a banking partner with streamlined processes for Lexstart clients that is familiar with the platform's documents.

What is share capital?

Share capital defines the ownership structure of the corporation. It determines how many shares can be issued and what rights are attached (voting, dividends, redemption). A simple structure suits solo founders, while a flexible structure accommodates future investors or partners.

When should I use a service agreement?

Ideally before starting any service. Having the contract signed in advance ensures the collaboration begins on clear and professional terms, and prevents misunderstandings about scope, timelines, and compensation.

Do shares need to be paid for when issued?

Yes. Shares must be issued in exchange for value, whether in cash, property, or services, in accordance with applicable rules. This consideration must be documented in corporate records to ensure legal validity.

When must a corporation amend its articles?

An amendment to the articles is required when changes affect the corporation's foundational elements: name change, modification of share structure, addition or removal of share classes, amalgamation, or continuation. These changes cannot be made through a simple annual update and require the intervention of Barricad Avocats.

Is the shareholders' agreement public or confidential?

A shareholders’ agreement is not automatically public, but confidentiality is not absolute. For a corporation governed by Quebec’s Business Corporations Act, the existence or termination of a unanimous shareholder agreement that restricts or removes directors’ powers must be declared to the Registraire des entreprises. Creditors may also consult a unanimous shareholder agreement in the corporation’s records. The agreement’s text, the declaration of its existence and statutory inspection rights are therefore different matters.

Source: Quebec Business Corporations Act, sections 32 and 215 (French). Have a professional verify the rules applicable to your corporation and agreement.

When does Lexstart refer to Barricad Avocats?

Lexstart is designed for standardized procedures: incorporations, annual updates, contract templates. Barricad Avocats steps in for situations requiring customized legal analysis: complex shareholders' agreements involving investors, corporate restructurings, business sale or acquisition transactions, atypical contract drafting, and any situation requiring personalized legal support.

What do Lexstart's General Terms of Sale cover?

Lexstart's GTS govern the purchasing terms for services offered on the platform: order process, payment, cancellation and refund policy, and respective responsibilities of the client and Lexstart. They apply to any purchase made on lexstart.ca.

Do I need a new contract for each mandate with the same client?

It depends on the relationship. If you work regularly with the same client on similar recurring mandates, a master agreement signed once with addenda or purchase orders for each mandate is more efficient. If each mandate is substantially different (scope, price, deliverable), a new contract is recommended.

Must an employment contract comply with Quebec's minimum labour standards?

Absolutely. The contract cannot provide conditions below what the Act Respecting Labour Standards guarantees: minimum wage, vacation, statutory holidays, and termination rules. If a clause provides less than the law, the law applies and the clause is void. The contract serves to go beyond the law and govern what it does not cover.

Why should my website have Terms of Use?

Terms of Use help protect your business by setting the rules for using your platform, limiting your liability, and regulating user behavior.

Do I need domiciliation if I already have a commercial office?

If you have a commercial lease in your corporation's name, using that address as the registered office is perfectly valid. Domiciliation is most useful for entrepreneurs who work from home, do not yet have a fixed office, or want a prestigious address in Old Montreal to strengthen their image.

Should I display my General Terms of Sale on my website?

Yes. It is strongly recommended that customers can review and accept the General Terms of Sale before completing a purchase so they are legally enforceable. Active acceptance (checkbox or I agree button) is necessary for important clauses.

Does someone review my file before it is filed with the registry?

Yes. The Lexstart team validates all information before proceeding with the filing. If anything is ambiguous or incomplete, we contact you directly to clarify. It is not a fully automated system: a qualified person reviews every file before filing.

Does a Privacy Policy protect my business in the event of a data breach?

Yes. A well-drafted Privacy Policy demonstrates that you have taken compliance measures and reasonable care, which can limit your liability in case of an incident.

Does a shareholders' agreement replace the articles of incorporation?

No. The articles define the corporation's legal structure, while the shareholders' agreement governs the contractual relationship between shareholders. Both documents serve distinct and complementary purposes.

Is French required in a company name in Quebec?

In Quebec, a corporate name must comply with the Charter of the French Language. It generally must include a French element or meet applicable linguistic rules. Exceptions apply for registered trademarks. A name availability check is recommended before submitting an incorporation request.

What is the Lexstart shareholders' agreement model?

The Lexstart shareholders' agreement model is a document prepared and validated by lawyers, covering the most common corporate situations: share transfers, right of first refusal, death, disability, non-compete clauses, and governance. It is a solid legal foundation, ready to use as-is, with no customization performed on the platform.

Does Lexstart update the minute book as part of the annual update?

The annual update primarily concerns filing with the REQ. The minute book is a separate internal corporate record. Depending on the company's situation, additional internal updates may be required. Barricad Avocats can assist with this process to ensure full compliance.

Does Lexstart serve entrepreneurs outside Quebec?

Lexstart specializes in Quebec (QBCA) and federal (CBCA) incorporations. For a Quebec-based entrepreneur wanting to operate across Canada, federal incorporation through Lexstart is the right option. Provincial incorporations outside Quebec are not currently offered.

If I start with Lexstart and need more, is the transition to Barricad Avocats smooth?

Yes. Since Lexstart is Barricad Avocats' own platform, the transition is seamless. Documents prepared by Lexstart (articles, minute book, resolutions) are directly usable by Barricad attorneys. You do not have to start over or re-explain everything — the team already knows your file.

What does a service agreement usually include?

It typically includes a description of the services, deliverables, fees, timelines, intellectual property, limitation of liability, confidentiality, and termination terms.

What is a right of first refusal clause?

A right of first refusal requires a shareholder wishing to sell shares to first offer them to existing shareholders on the same terms. This clause helps control new shareholder entry and maintain ownership stability.

What does the Lexstart annual update subscription include?

The annual update subscription covers preparation and filing of your REQ update, associated provincial and federal corporate filings, and simple annual resolutions. Each year, the team contacts you to validate information, integrates necessary changes, and files within required deadlines. It is a way to never miss this obligation without having to think about it.

Does the Lexstart agreement protect minority shareholders?

The model includes mechanisms governing major decisions and share transfers, contributing to protecting minority shareholders. More specific or complex protections may require a customized agreement through Barricad Avocats.

Why is the minute book mandatory?

The minute book contains the articles, resolutions, registers of shareholders and directors, and share certificates. It serves as official proof of corporate decisions. In the event of a tax audit or bank financing, this document is essential to demonstrate the corporation's legal compliance.

Can the contract limit my liability?

Yes. A limitation of liability clause can be included to manage the financial risks related to your services, within the limits permitted by law.

Are government fees included in the displayed price?

Yes. Government fees (REQ for Quebec, Corporations Canada for federal) are added to the Lexstart fee. These fees are set by the authorities and vary by chosen structure. They are always shown separately in the pre-payment summary, with no surprises.

Why does Lexstart refer to Decode for trademarks?

Lexstart focuses on corporate procedures. Trademark filing is a distinct process requiring IP specialization: prior art searches in Canadian and international databases, risk analysis, drafting product and service descriptions, filing with CIPO, and monitoring the examination process. Decode specializes in this area.

What is a current update and when must it be filed?

A current update must be filed when changes occur during the year, such as a change of address, director, or business activity. It must be submitted within the legal timeframe to ensure public records remain accurate. Failure to report changes may expose the corporation to penalties.

Who is the Lexstart employment contract template for?

The template is designed for Quebec SMEs and entrepreneurs who want to hire their first employees or structure their team with a clear and professional legal framework, compliant with Quebec's Act Respecting Labour Standards.

Can I modify my file after submitting my order?

If your file has not yet been filed with the registry, the team can make corrections at no additional charge. If filing has already occurred, an amendment to the articles of incorporation will be required and government fees will apply. Contact the team as quickly as possible via your confirmation email.

What is the difference between common and preferred shares?

Common shares typically provide voting rights and residual profit participation. Preferred shares can include special rights such as dividend priority or liquidation preference. They are often used in investment rounds to protect investors and structure financial relationships between shareholders.

Does the Lexstart agreement regulate share transfers to third parties?

Yes. The model includes a right of first refusal mechanism requiring a shareholder wishing to sell shares to first offer them to existing shareholders under predefined conditions, limiting unwanted third-party entry into ownership.

Why include a probation period?

A probation period allows the employer to evaluate whether the employee is a good fit for the role and the company. It provides greater flexibility in case of termination during the first months.

Can Lexstart's Terms of Use change?

Yes. Lexstart reserves the right to modify its Terms of Use at any time. Users will be informed of significant changes. It is recommended to consult this page regularly to stay up to date.

What is business domiciliation and why would I need it?

Domiciliation means using a distinct professional address as your corporation's registered office, rather than your personal address. In Quebec, the registered office address is public information accessible through the REQ registry. Domiciliation protects directors' privacy and gives a professional image to the corporation, even for entrepreneurs who work from home.

Are contract templates included in incorporation or sold separately?

Contract templates (shareholders' agreement, service contract, employment contract, T&C, GTS, PIPP) are standalone products sold separately, available directly through the platform. Some are a natural complement after incorporation, particularly the shareholders' agreement for corporations with multiple partners.

Is a Privacy Policy mandatory in Quebec?

Yes. Since the implementation of Law 25, any organization that collects personal information must publish a clear and accessible policy. The obligation aims to ensure transparency toward individuals whose data is collected.

When should I consider incorporating?

Incorporation becomes relevant when your activity generates recurring income, involves contractual risk, or includes multiple stakeholders. It is strategic if you plan to retain profits to finance growth or welcome partners. The objective is to legally structure your activity in a coherent and sustainable way.

How do I keep my Privacy Policy up to date?

Your Privacy Policy must be reviewed whenever your data collection or processing practices change: adding a new tool, changing a provider, modifying purposes, or regulatory changes. An annual review is a good minimum practice, even without apparent changes.

Can I amend my articles or share structure later?

Yes. A corporation can amend its articles to change its name, share structure, or other fundamental elements. Such changes usually require shareholder resolutions and filings with the appropriate registry. Proper initial structuring reduces the need for later amendments.

Is the annual update required even if my corporation is inactive?

Yes. As long as the corporation has not been formally dissolved, it must file its annual update, even if it generated no revenue or conducted no business. The obligation relates to maintaining registration and legal compliance.

Missing two consecutive declarations can lead to cancellation and dissolution. The details are in our guide to inactive corporation obligations.

Does Decode work with Quebec businesses?

Yes. Decode supports Quebec entrepreneurs and businesses in protecting their intellectual property in Canada and internationally. The team understands the specific challenges of startups and growing SMEs looking to secure their commercial identity and innovations from the earliest stages of development.

Is an amendment to the articles more complex than an annual update?

Yes. Amending the articles involves formal shareholder or director resolutions, legal analysis of the current structure, and a specific filing with the registry. It directly affects the corporation's legal structure. Barricad Avocats handles these procedures to ensure full compliance.

What services does Lexstart offer?

Lexstart offers three service categories :

- Incorporation : provincial in Quebec (QBCA) or federal (CBCA) - Annual compliance : annual REQ update - Contract templates : shareholders' agreement, service contract, employment contract, T&C, GTS and PIPP

For needs beyond these services (taxation, financing, custom corporate law), Lexstart refers to Barricad Avocats or Barricad Fiscalistes.

Can I use the domiciliation address from the moment of incorporation?

Yes. The address can be used immediately after subscribing, whether in the articles of incorporation, the Lexstart incorporation form, or for REQ filings. A 48-business-hour activation period applies for full setup of the client portal and operational mail management.

What is the real difference between staying self-employed and incorporating?

As a self-employed person, you operate under your personal name and are directly liable for all debts and obligations. Income is reported on your personal tax return at the personal marginal rate, significantly higher than the corporate rate in Quebec. By incorporating, you create a separate legal entity. The corporation pays tax at the corporate rate, which is much lower. You control when and how you compensate yourself (salary, dividends, or both). Personal liability is in principle limited to obligations you have personally guaranteed.

Do I need to publish my Privacy Policy on my website?

Yes. Law 25 requires that it be easily accessible to anyone whose personal information you collect. It must be published on the company website in a visible and permanent manner.

How do I contact Barricad Avocats from Lexstart?

From the Lexstart platform, a referral to Barricad Avocats can be initiated directly. You can also contact Barricad Avocats through their website to schedule a consultation. The Lexstart team facilitates the referral and transfer of the existing file to avoid any repetition of information.

Can Lexstart help me find an accountant or a bank?

Yes. Lexstart works with a partner network: the National Bank of Canada for corporate banking services, Bankeo for accounting, and Domiciliation Montréal for registered office address. The goal is to ensure continuity between the legal incorporation of the corporation and its operational management.

Is the Lexstart agreement valid for Quebec and federal corporations?

Yes. The model is structured to be compatible with corporations incorporated in Quebec or federally, provided it aligns with the existing corporate structure. The articles must remain consistent with the agreement.

What is the free 15-minute appointment with Lexstart for?

The 30-minute appointment with a client advisor allows you to present your situation and better understand which option fits your needs. This is not a legal consultation. The goal is to direct you to the right service: provincial or federal incorporation, annual update, contract template, or referral to Barricad Avocats or Barricad Fiscalistes depending on your situation. No purchase obligation.

I use HubSpot, Stripe, and Google Analytics. Must I mention them in my Privacy Policy?

Yes. If you use third-party tools that collect or process your users' personal data, you must identify them in your Privacy Policy and explain the purpose for which data is transmitted to them. This is a transparency requirement of Law 25. Most common tools to mention: CRM (HubSpot), payment (Stripe), analytics (Google Analytics, Hotjar), email (Mailchimp), hosting (AWS, Azure).

Can I choose any name for my corporation?

A corporate name must comply with registry rules (REQ or Corporations Canada), avoid confusion with existing businesses, and meet Quebec's linguistic requirements. Lexstart performs a name check as part of the incorporation process.

What happens if I do not file my annual REQ update?

Failing to file the annual REQ update can result in the company being struck off by Quebec authorities. A struck-off corporation loses its legal personality, which can have significant consequences on its contracts, bank accounts, and the personal liability of its directors. The Lexstart compliance subscription helps avoid this situation by ensuring annual obligations are met.

Who do Lexstart's Terms of Use apply to?

The Terms of Use apply to anyone who browses lexstart.ca or uses Lexstart's services. By using the platform, the user accepts the conditions described in this document. It is recommended to read them before submitting an order.

Does Lexstart offer minute book update services?

Lexstart provides incorporation and annual REQ compliance solutions. For detailed and structured minute book updates, particularly in complex situations, specialized legal assistance through Barricad Avocats is recommended to ensure full compliance.

I changed my address and director this year. Does the annual update cover these changes?

Yes. The annual update is the opportunity to declare all changes that occurred: head office address, board composition, activities, ultimate beneficiaries. If a change occurred during the year and was not yet declared, a current update should normally have been filed within 30 days of the change.

What does incorporation really cost in Quebec or Canada?

The cost of incorporation includes two components: government filing fees required by the Quebec enterprise registrar or Corporations Canada, and professional fees for drafting the articles, share structure, and minute book. Beyond the initial cost, annual obligations such as the REQ update and corporate record keeping must also be planned for. Structuring your corporation properly from the start helps avoid costly corrections later.

Is incorporation relevant for consultants or freelancers?

For consultants generating stable income, incorporation helps manage contractual liability, structure compensation, and reinforce professional image. It becomes particularly relevant as revenue increases or subcontractors are involved.

How do I choose between provincial and federal incorporation?

If you primarily operate in Quebec without short-term national expansion plans, provincial incorporation under the QBCA is generally sufficient. It protects your name in Quebec. Federal incorporation under the CBCA is relevant if you want to operate in multiple provinces or protect your name nationally. A federal corporation must still register in Quebec to operate there, which involves additional steps and fees.

What documents does BNC need to open a corporate account?

You purchase your services on Lexstart (incorporation, shareholders' agreement, contract, etc.), then open your corporate account at National Bank within 3 months of your Lexstart order. The $350 refund is deposited directly into your BNC account no later than 2 months after account opening. To qualify, you must maintain the selected BNC products and services for a minimum of 24 months. The offer is not retroactive and cannot be combined with other BNC promotions.Lexstart will refer you

What is the difference between Terms of Use and a Privacy Policy?

Terms of Use govern how the site or service is used: access rules, permitted behaviors, responsibilities. The Privacy Policy explains how users' personal data is collected, used, and protected. Both are distinct and complementary documents.

Do the Lexstart General Terms of Sale apply to B2B sales as well?

The template is primarily structured for consumer sales (B2C) in compliance with the Consumer Protection Act. For strictly B2B sales, different rules apply as the CPA does not apply. If your business model is primarily B2B, the template remains usable but may need adjustments. Barricad Avocats can assist with this adaptation.

What is the difference between registering a name at the REQ and registering a trademark?

REQ registration only protects your name in Quebec to avoid confusion with another registered company. It is not trademark protection. A trademark registered with the Canadian Intellectual Property Office (CIPO) gives exclusive rights to use that name, logo, or slogan across Canada for 10 years, renewable. To truly protect your commercial identity, trademark registration is essential.

Why is it important to maintain compliant status with the REQ?

Compliant status confirms that the corporation fulfills its legal obligations. It strengthens credibility with financial institutions, suppliers and partners. Annual compliance is part of sound corporate governance and protects the company's legal continuity.

What is a Privacy Policy?

A Privacy Policy is a legal document explaining how your business collects, uses, stores, and shares the personal information of your clients or users, in accordance with Quebec's Law 25. Its publication is mandatory for any organization that collects personal information.

Is a non-compete clause truly enforceable in Quebec?

In Quebec, non-compete clauses are valid but must be reasonable. Courts evaluate three criteria: duration (generally 1 to 2 years maximum), territory (limited to the area where the employee actually worked), and the nature of prohibited activities (must be sufficiently specific). An overly broad clause will be reduced or voided. The Lexstart template includes a standard clause, but for sensitive businesses (technology, trade secrets), custom drafting through Barricad Avocats is recommended.

What is the Lexstart refund policy?

Contract templates are delivered immediately after purchase and are non-refundable once downloaded, as the service has been rendered. For incorporations, if the file has not yet been submitted to the government registry, a refund request may be considered. Government fees already paid to the authorities are never refundable. Full details are specified in Lexstart's General Terms of Sale.

What is an ultimate beneficiary and must it be disclosed?

An ultimate beneficiary is the natural person who directly or indirectly owns or controls a significant percentage of shares or voting rights. In Quebec, this information must be disclosed to the enterprise registrar to ensure corporate transparency and prevent opaque ownership structures.

Can I include a clause on data retention?

Yes. The clause should specify how long data is retained and how it is secured or deleted at the end of that period.

What happens if I made a mistake in the form after payment?

If the error is noticed before the registry filing, the team can correct it at no extra charge. If noticed after filing, an amendment to the articles will be required and government fees will apply. The pre-payment summary is specifically designed to prevent this situation.

Does Lexstart offer article amendment services?

Lexstart primarily focuses on incorporations and annual updates. Complex amendments to the articles, such as share restructuring or major corporate transactions, require specialized legal assistance through Barricad Avocats.

Can I incorporate while remaining employed?

Yes. It is possible to operate a corporation while remaining employed. However, your employment contract should be reviewed for non-compete or exclusivity clauses. Incorporation allows you to structure a side project without mixing income streams.

Can Decode also help with patents or other IP assets?

Yes. Decode covers the full IP spectrum: trademarks, patents, copyright, industrial design protection, and non-disclosure agreements in an IP context. If your business creates something unique (technology, design, process, innovation), a consultation with Decode to identify what can be protected is a strategic step.

Can the Lexstart agreement be amended later?

Yes. A shareholders' agreement can be amended with the consent of the parties according to its terms. Any amendment should be formally documented to maintain legal consistency with the corporate structure.

What is the difference between a shareholder and a director?

A shareholder owns shares and holds economic and voting rights. A director is responsible for strategic decisions and management. The same person may hold both roles, but their legal responsibilities are distinct.

Can Barricad Avocats review an existing shareholders' agreement?

Yes. Barricad Avocats can review an existing shareholders' agreement, identify gaps or provisions that are no longer adapted to the corporation's current situation, and propose appropriate amendments. This approach is particularly recommended before an investor entry or structural change.

How long until I receive my documents?

The average timeline is 5 business days for a standard incorporation, provided all information is complete and the registry is not overloaded. You will be notified by email as soon as your documents are ready.

Does Lexstart offer support in English?

Yes. The Lexstart team can assist you in both French and English. The platform and documents are available in both official languages.

Why does Lexstart offer fixed prices rather than hourly rates?

Because entrepreneurs need predictability. When launching a business, you do not want a bad surprise on your legal bill. The fixed price covers the entire service from form submission to document delivery. The only variable costs are government fees set by law and imposed by the REQ or Corporations Canada.

Is the Lexstart service agreement suitable for all industries?

The template is designed to be versatile and cover most common service-based activities. It can be adjusted by the client to fit their specific needs, but remains a standard template with no customization performed on the platform.

What is covered by the in-year updates included in the subscription?

Covered in-year updates include registered office address changes, director or officer changes, and REQ information updates. Amendments to the articles of incorporation, new share issuances, or corporate restructurings are not included in the subscription and are handled separately.

What share structure options does Lexstart offer?

Lexstart offers two main options: a simple structure with two share categories suited for solo entrepreneurs, and a flexible structure with up to 21 share classes for projects requiring advanced planning or investor readiness. The appropriate choice depends on growth, tax, and governance objectives.

Do I need to update my minute book after amending the articles?

Yes. Any amendment to the articles must be reflected in the minute book, including resolutions and supporting documents. The minute book must always match the corporation's current legal reality. Barricad Avocats can assist with this update as part of a restructuring process.

Can I limit my liability through General Terms of Sale?

Yes. General Terms of Sale typically include limitation of liability clauses within the limits permitted by law.

When should I have my service contract customized?

Customization is recommended if your business involves specific risks: high liability, complex intellectual property, multiple partners, high-value contracts, or specific regulatory requirements. In these cases, Barricad Avocats can handle drafting a tailored contract.

What is the difference between a service contract and an employment contract?

This is a fundamental and often misunderstood distinction. An employment contract creates a subordination relationship: the employee works under the employer's direction, on their schedule, with their tools. A service contract is made with a self-employed person or company that maintains independence in how the work is performed. The distinction has major tax implications: the employer withholds source deductions for an employee, not for a contractor. If the relationship resembles employment but is structured as a service contract, tax authorities may reclassify it.

Why is it important to have a written service agreement?

Even though a verbal agreement can be valid, a written contract helps clarify expectations and reduce the risk of disputes. It serves as proof in case of disagreement and clearly defines the scope of services, timelines, and compensation.

Can a shareholders' agreement restrict competition between shareholders?

Yes. It may include non-competition and non-solicitation clauses designed to protect the company from competing activities carried out by a shareholder during or after ownership.

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