Why Every Canadian Business Needs a Shareholders’ Agreement

In this article, we’ll cover the following topics:

• Why shareholders’ agreements are useful

• The legal power of shareholders’ agreements

• The shotgun clause

• Default provisions

Shareholders’ agreements are notoriously frustrating documents, mainly because they are long – in some cases, 60 pages long – and loaded with confusing legalese. Yet they are among the most important documents in any business owner’s arsenal, and having competent counsel on your team can help to eliminate some of that confusion.

Don’t believe me? Here’s a story that will change your mind…

5 Professionals to Consult Before Starting Your Small Business

There are many important steps that need to be taken prior to starting a small business. Consulting with professionals can help prevent negative legal consequences for you and your business down the line. Here are some of the most important professionals you should consult before starting your business.

1.An Accountant

Prior to starting a small business, it is important to have your finances sorted and learn about taxes, both of which an accountant can help with. An accountant will also be able to review your business plan and budget and ensure that your numbers are all correct.

Your accountant can also be a trusted advisor as your business grows. He/she may be able to help you think over opportunities that present themselves along the way.

Starting a Small Business in Vancouver

The prospect of starting your own business is a life changing step full of emotions. Many small businesses fail within the first five years and that is why it is important that you take all the necessary steps to protect your business and get it off the ground

1.Conduct market research

The first step should always include researching the market for the product or service you wish to offer. There are several questions you should seek to answer during this research stage. Start by determining if there is market/demand for the product/service you are planning to offer. You should also consider who your customers will be and if there are any competitors and who they are.

Should I Incorporate my own Company?

It is possible to incorporate yourself. You can do this without any legal help as BC has an online incorporation system. It is important to note however, that even with online resources, it is still possible to make mistakes before, during, and after your incorporation.

Common mistakes

Although the government website provides forms for incorporation, this does not include all of the forms that you require. Relying on government-provided forms alone will not be sufficient for you to incorporate your company. In addition, the forms or online incorporation system may prove confusing to some people and a small business lawyer can help clear up that confusion. There is also the possibility that you may make mistakes when completing the forms and that is why it is always good to have a lawyer look them over.

Canadian small businesses will receive some rent relief during COVID-19

Prime Minister Trudeau announced on Thursday April 16, 2020 a new program to assist small businesses that are stuck in commercial lease agreements that they cannot make payments on.

The Canada Emergency Commercial Rent Assistance program (“CECRA”) will assist small businesses with rent for April, May and June.

Details on the CECRA program

The program will, according to a PM’s office press release “seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgo the rent of small businesses for April (retroactive), May, and June.”

Thinking of Incorporating your Small Business?

This video describes the main benefits of incorporation for the small business owner:

1) Liability protection

2) Saves you money on taxes

3) Eligibility for the Lifetime Capital Gains Exemption upon sale of your shares

4) Flexibility in how you structure, fund and operate your small business