BENEFITS OF A LAWYER INCORPORATING YOUR COMPANY
Business incorporation lawyer assisting entrepreneurs and start-ups incorporate the appropriate corporate entity to advance their commercial ventures.
Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
Although its technically possible to incorporate a company without a lawyer, engaging a knowledgeable incorporation lawyer offers significant advantages and can save you a lot of headaches, and potentially money, in the long run. The value proposition arising from engaging an experienced incorporation lawyer to undertake the incorporation of your new company cannot be understated, with some of the more consequential benefits including:
A. Ensuring Proper Structure from the Outset:
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Share Structure: This is one of the most critical aspects. A lawyer will help you design a share structure (e.g., common shares, preferred shares, voting vs. non-voting shares) that aligns with your current and future business goals, including potential investors, family involvement, and succession planning. Many online incorporation services offer a very basic, generic share structure that might not suit your needs as the business grows, leading to costly amendments down the road.
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Articles of Incorporation & Bylaws: These are the foundational documents that govern your corporation. A lawyer drafts robust and customized articles and bylaws, ensuring they comply with the relevant corporate legislation (federal or provincial) and address specific aspects of how your company will be governed, how decisions are made, and the rights and responsibilities of directors, officers, and shareholders. Generic online templates often miss crucial details.
B. Minimizing Personal Liability:
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While incorporation generally provides limited liability, there are exceptions (e.g., personal guarantees on loans, fraudulent activity). A lawyer can advise you on potential risks and help structure your affairs to maximize personal asset protection.
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They ensure all post-incorporation steps are correctly completed, which is vital for maintaining the "corporate veil" and ensuring your limited liability protection holds up.
C. Comprehensive Post-Incorporation Compliance (Corporate Minute Book):
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Incorporation isn't just about filing the initial documents. Every Canadian corporation is legally required to create and maintain a corporate minute book. This is a physical or digital record of all key corporate documents, including:
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Certificate of Incorporation
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Articles of Incorporation
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Bylaws
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Resolutions of directors and shareholders (e.g., appointing directors and officers, issuing shares, setting the financial year-end)
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Share certificates and registers
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Annual resolutions and reports
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Many online services only complete the initial filing. A lawyer ensures your minute book is properly set up, complete, and maintained, which is crucial for legal compliance, attracting investors, securing financing, and eventually selling the business. Without a proper minute book, your corporation may not be considered legally valid in certain situations.
D. Tax Optimization:
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Your business' corporate structure should be set up to take full advantage of Canadian tax benefits like the Small Business Deduction and the Lifetime Capital Gains Exemption. Incorrect structuring at the outset can prevent you from accessing these valuable tax savings later (or require costly restructuring to be undertaken, which may not fully access potential Canadian tax benefits).
E. Name Search and Reservation:
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Lawyers conduct thorough name searches (NUANS or provincial equivalent) to ensure your chosen corporate name is available and doesn't infringe on existing trademarks or corporate names, preventing potential legal disputes and re-branding costs.
F. Shareholder Agreements:
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If you have more than one owner, a lawyer will draft a comprehensive shareholder agreement. This critical document outlines the rights and responsibilities of each shareholder, how disputes will be resolved, what happens if a shareholder leaves or dies, share transfer restrictions, and other vital provisions. This prevents costly and potentially business-destroying disputes down the road. Online incorporation services rarely include this essential document.
G. Ongoing Legal Advice and Future Planning:
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Establishing a relationship with a corporate lawyer from the beginning provides you with a trusted advisor who understands your business's legal foundation. They can guide you on future legal matters, such as:
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Drafting and reviewing contracts
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Employee agreements
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Intellectual property protection
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Financing rounds
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Mergers, acquisitions, or sale of the business.
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As a corporate business lawyer, I have been dealing with the corporate law and business matters for over a quarter century, and understand the importance of asking the appropriate questions, and follow-up questions, in advance of incorporating a new company and structuring its business.
Structuring the incorporation of a company can be incredibly important to its advancement and optimizing its business, such that knowledgeable legal counsel for the specific purposes of the business tends to be highly advantageous. So if you are looking to incorporate a new corporation or deal with the corporate legalities impacting your company, contact us at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or via email at Chris@NeufeldLegal.com.
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