With the convenience of online search engines and the easy attainability of information, it may seem tempting to skip professional guidance when incorporating your business and instead rely on what is found online. Although there is no legal requirement to retain a lawyer, there can be challenges associated with incorporating a business independently. Therefore, this article will outline the difficulties that may arise with incorporating a business without the assistance of a lawyer and how including one in the process can help ensure that your entrepreneurial beginnings lead to success in the marketplace.
To incorporate a business, one must first determine the law that will regulate the corporation. Is the business a federal corporation – in that it is incorporated under the Canada Business Corporation Act, or is it provincial – incorporated under the law of incorporation of Ontario? It is essential to understand the differences between the two as legal consequences may occur if a business is being conducted provincially but is only registered federally. Incorporating under the federal Act does not exempt you from the obligation of incorporating in the province in which you operate. Thus, a lawyer will ensure that the business is incorporated under the appropriate regulations.
Next, before a business can be incorporated, a name for the company must be reserved, allowing the submission of up to three names for approval. It is crucial to ensure that the corporate name chosen is free of rights – not being used by another company. A lawyer can ensure the corporate name is not already in use as they have the materials to conduct proper checks. Allowing a lawyer to do these checks can avoid a corporate name refusal from the appropriate government authority, saving time in the process. Even if government services approve the name, the approval does not ensure that a trademark is not owned on the name. If this is the case, and one chooses to continue using the corporation name, legal penalties and sanctions can occur. Government services do not conduct trademark checks on the proposed names when approving corporation names. Therefore, a lawyer will do their due diligence to ensure all proper verifications are completed before the proposal is submitted.
Aside from the name proposal, other business start-up legalities that a lawyer can assist with include, but are not limited to:
- determining a share structure that is suitable for the business
- obtaining the appropriate licenses specific to operating the business
- preparing contracts such as distribution, employment, service etc.
- tax planning tools
- and more
At 6ix Estates LLP, we can help your business in drafting Corporate and Commercial documents. Ask us about how we can help you start your business, or to protect your ongoing business interests by contacting us for a free 30-minute consultation.