WHATS NEXT?

March 26th from 11am-3pmVelocity Fund Finals

SLC Great Hall

velocity.uwaterloo.ca/events

VeloCity Alpha Workshop:Set Up Your Business Like

a BossThe Legal Stuff

Genie Lyon, Velocity Lawyer and General Advice Dispenser

March 18, 2015

?

Business Success!!!

Only you can determine what your path will be – lawyers only provide guidance.

Legal Entities Sole Proprietorship• Legally, You = Your sole

proprietorshipBENEFITEasy to set up – all you need

to do is register the business name

DRAWBACKBecause there’s no difference

between you and the business, any personal asset you own is fair game for business debts

Legal Entities Partnership• Legally, You and your partner(s) =

Your partnershipBENEFITEasy to set up – all you need to

do is register the business name

DRAWBACKSame drawbacks as sole proprietorship,

PLUS you’re responsible for your partner’s actions/debts – if they fall, so do you

It’s important to get a partnership agreement in place so everyone’s on the same page.

Legal Entities Corporation• Legally, a corporation is separate from

you – it’s a legal entity in its own right.BENEFITSeparation between business and the

individuals involvedEasier to get investorsEasier to transfer ownershipDRAWBACKExpensive to set up and maintainMore legal administrative work is

required on an ongoing basisNot easy to dissolve

Less common business formats

Joint Venture• Not a legal entity• Agreement-driven• Used when several people want to pursue a common projectCo-operative• Special type of corporation• Most commonly used for non-profit organizations, not for-profit

ventures• For the benefit of members only

Setting up your business properly

Business Name• Must register business name if it differs from

your full name or your corporation name• Can be a trademark, but doesn’t have to be

Registrations and Permits• Business name and business number• WSIB, CRA and other applicable agencies

Structural Documents• Minute books – company’s corporate record• Shareholders’ and partnership agreements• Employment agreements (to be discussed

later)

Setting up your business properly (continued)

Compliance with Laws and Regulations• How you sell and market

Canada’s Anti-Spam Legislation, Competition Act

• How you store personal information and data• PIPEDA, MFIPPA, HIPAA

• Laws, regulations and certifications specific to your business/product/service• Export and Import

Be mindful of the jurisdiction you’re operating in!

Setting up your business properly (continued)

Business FacilitiesOffice Space – Buy or Lease?• Most start-ups lease space, due to lack of capital to purchase• Get a good agent and read the lease for “gotchas”, mindful of your

use of the space• Be clear about what the term is and how to get out• If buying, watch for zoning and construction complianceOffice Equipment and Services• Watch out for contracts that lock you in and have onerous

penalties to get out• Be aware of suppliers’ right to liens, repossession and distraint

Running your business wiselyEmployees and Contractors• Hiring employees versus using contractors• Understand your obligations under the

Employment Standards Act, 2000 and other legislation, like pay equity

• Best to have agreements that are protective and accurately reflect the relationship

• Employees and contractors need to be paid for agreements to be enforceable

• Try to avoid paying with equity• Useful to develop employee policies

Running your business wiselyProtecting your intellectual property• Non-Disclosure Agreements / Confidentiality

Agreements• Traditional forms of registered protection –

patents, copyright, industrial design, trademark• License Agreements• Enforce your rights – eg. trademarks are tied to

your reputation and are tested based on whether they can be confused with someone else’s

• Identify your IP and watch out for contamination

Mind if I hitch a ride?

HEY! Get off!

Agreements that can help you – if done well

Investment and Financial Agreements• Can be some of the driest and most confusing

legal agreements, with the smallest text size, you will ever see. You should still read them and be aware of what you’re signing up to.

• Watch out for onerous penalty clauses and other strings tied to the money they provide

• Be aware of repayment terms, conditions and milestones, if any

• Try to avoid giving up your IP and ownership of your business (may be disguised in the form of putting up IP or shares as collateral)

Agreements that can help you – if done well

Customer and Supplier Agreements

Buy

Supplies

$

General Rule: Be clear and be detailed!• Make sure that your obligations and your

requirements are clearly covered – how long it will last, what your liabilities are, and all the financial details

• Look at worst case scenarios and make sure they’re covered

• Make sure there’s a clear way to exit the agreement

• Avoid “scraping” agreements from other sources

In closing…The legal protections and agreements that you decide to put in place or to dispense with, after consulting with your lawyer, can make the difference between this: and this:

Ultimately, they need to reflect what you want in your business, so make your choices wisely, and make sure what’s on paper is accurate.

AAAAAAAAAGGGGHHHH!!!

ResourcesService Ontario

To find out more information about starting a business in Ontario, you can go to the following site. Under “Topics”, click on “Business”. The menu item “Topics” on the Business page contains a wealth of information. http://www.ontario.ca/serviceontario

Canada Business Network

This site provides a general overview about starting a business. There is some overlap with the Service Ontario site, but it is a bit better organized, and it gives the federal perspective, as well as linking to business sites of provinces other than Ontario. http://www.canadabusiness.ca/eng/page/2856/

Law Society of Upper Canada

If you’re looking for a lawyer to advise you on something, but don’t know where to find one, check out this site. The Law Society of Upper Canada regulates lawyers, and their site offers services to the public, including a lawyer referral service, a directory of lawyers, and a list of lawyers who are certified specialists in certain areas of law. http://www.lsuc.on.ca/

Library

Don’t underestimate the amount of information you can get from the website of your local library. If you have a library card, you have access to databases that you would otherwise need to pay for, and the library’s website also often links to other useful sites, including local resources. Below is the URL for the Waterloo Public Library’s resource page for businesses. http://www.wpl.ca/ebranch/research/business-employment/

Laws

Sometimes, it’s useful to look at the text of the actual law affecting you – not just someone’s summary or interpretation of the law. Looking at the law gives you the information about your legal obligations without any filter. Some laws are easier to read than others, of course! Looking at the law also has the benefit of pointing you in the direction of the ministry, tribunal or other entity in charge of the subject matter. http://www.canlii.org/en/index.html

Resources (continued)Specific Governmental Websites

Don’t overlook the websites run by the various provincial ministries or federal departments – they often contain fact sheets and other easy-to-read documentation that can guide you through common problems. I’ve listed a few of them below.

Employment Issues

A good resource for those tricky questions respecting what you need to do in various employment situations, and how to comply with the minimum statutory employment requirements: http://www.labour.gov.on.ca/english/es/index.php

You will also need to comply with pay equity legislation as you grow: http://www.payequity.gov.on.ca/en/index.php

And don’t forget about the Workplace Safety and Insurance Board! www.wsib.on.ca/

Exporting and Importing

If your business will involve selling your products or services abroad, you will probably want to check whether you require any export permits, and whether there are any restrictions on your type of product or service. This site is also good for getting governmentally researched market information. http://www.international.gc.ca/commerce/tools_trade-outils_commerce.aspx?lang=eng

WHATS NEXT?

March 26th from 11am-3pmVelocity Fund Finals

SLC Great Hall

velocity.uwaterloo.ca/events