Starting your own business can be a daunting task because of the risk and the investment involved. Countless steps need to be completed before you can officially open the doors of your business.
It is, therefore, essential to have the right experts to guide you in launching a business to make sure it starts with a solid foundation.
To make sure you don't forget anything, preparing a complete checklist of the essential aspects of starting a business is most recommended. Business and commercial lawyers are the most qualified professionals to prepare for a business start-up. A lawyer will be able to prepare a successful business plan so that your project will prosper!
JuriGo has prepared a “checklist” for an optimal business start-up and can refer you to qualified lawyers in the field.
Factors to consider before starting your own business!
Before we get into the legal issues, let's talk about business considerations first. After all, starting a business is a multi-disciplinary process wherein no aspect should be neglected. You must check all the boxes on this "checklist".
Here are a few things to think about before you start the legal process.
Is your idea original and marketable? Have you identified your target market? To do this, you will most likely need to conduct market research, partner with other experienced businesses, or develop a comprehensive marketing plan for your products and services.
Have you established your financial and manpower requirements? Is the amount of funding required determined and clear? Have you determined the number of employees you will need? Do you know if these needs will change in the near future and if so, how? Without the answers to these questions, it will be impossible to take the next steps.
Don't panic if you don't already have the answers to all these questions because it is the role of lawyers and other business start-up professionals to advise you on these matters!
See how business lawyers can help you build a solid business foundation.
The services of a business lawyer when starting a business!
If you're wondering when you should consult a lawyer for starting a business, our advice would be to do it as soon as possible as you will benefit from valuable advice and guidance right from the start.
Thus, you can avoid wasting time and go in the right direction. Lawyers can be involved early in the start-up process and offer the following services!
Business plan analysis and advice
It is not the lawyer's role to criticize your business ideas but it is his or her responsibility to advise you on the legal orientation of your ideas. He or she will be able to analyze your business plan from the very beginning in order to guide you towards the establishment of a viable business.
Incorporation of the start-up business.
After analyzing your business plan and your business idea, your lawyer can business incorporation if it seems appropriate. In incorporation, the drafting of a shareholders' agreement becomes essential to protect the shareholders of the corporation.
Preparation of Partnership Agreements (General Partnership/Sponsorship).
When you structure a business as a partnership, it becomes essential to draft a partnership agreement setting out the rights and obligations of all partners. As you may have guessed, it is the lawyer's role to prepare the contract for your general or limited partnership in order to clearly stipulate the operation of the business.
Drawing up employment contracts for employees.
An employment contract is often concluded verbally, but there is nothing to prevent it from being in writing. Putting the employment contract in writing becomes essential when you provide for a non-competition clause.
Leasing of commercial premises. Most businesses require the rental of commercial premises which also means the drafting and signing of a commercial lease. This lease contract commits you for the long term and for important financial considerations. Therefore, a legal professional must give you advice before you sign the lease.
Drafting of various contracts and collection of accounts
A new business often forms several agreements with partners and suppliers within a very short time to be able to start its operations quickly. Your lawyer will be behind you to ensure their compliance with these agreements, and to collect accounts due when one of your co-contractors fails to honor its obligations.
10 Steps in starting a business in Quebec explained!
There are many legal, financial, and tax issues involved in starting a business but the process doesn't have to be complicated if you have competent professionals guiding you.
To show you what it is like to start a business in Quebec, JuriGo explains the whole process in 10 simple steps that your lawyer will help you accomplish!
1. Prepare a business plan
Each business plan is unique and specific to the company. However, common elements must be found in any good business plan such as the company's situation, its brief history, its objectives, its growth plan, its marketing strategies, as well as a multi-dimensional operating plan.
The intervention of an expert is often needed during the preparation of such a plan to ensure its completeness! This plan is a "blueprint" for the business and is essential during the initial stages of a start-up. Everything starts with a plan, in business as in war!
2. Choosing a business structure
Depending on the specifics of your business project such as the number of partners and the field of operation, you will have to choose a business structure that suits your needs. You can choose from partnerships, corporations (incorporation), joint ventures, sole proprietorships, and many other variations of these same structures. Restructuring a business is a complex process so it's best to make the right choice from the start.
3. Determining the name of the business.
The name of any company established in Quebec must be registered with the Registraire des entreprises and comply with the formalities in this regard. In particular, the name must comply with the Charter of the French Language, must not be confusing with another company already registered, and must be free of obscene language. The name of a company can dictate a large part of its success so don't consider this step as secondary.
4. Registration with the Registraire des entreprises (Enterprises Quebec).
A business operating in Quebec must be registered with Enterprises Quebec (with a few exceptions). The information relating to the business must also be published in this same registry so that the public can see it.
5. Tax considerations of a business.
From business income to employee payroll deductions, there are more tax considerations in starting a business than you might think. Also, be aware that incorporated companies enjoy the tax benefits of incorporation and a preferential tax rate. You may want to talk to a tax lawyer to get an overview of the tax issues involved in running a business.
6. Establish the financing method
Banks, venture capitalists, and investors love money... there are many financing solutions for starting a business. That's not the problem! The challenge is to put together a business plan that is solid enough to make one of these lenders willing to finance your project. Easier said than done in many cases!
7. Choose a place of operation.
A business needs a head office and a place of operation! In many cases, this will involve renting a commercial space for the company's offices or to store the inventory in a warehouse. Commercial space can command exorbitant rents so don't take this step lightly!
8. Ensure operational compliance and obtain required permits.
Every industry comes with its own licensing and regulatory requirements. A major and often underestimated step in starting a business is obtaining these permits when they are required and ensuring your right to operate the business on the premises you desire.
9. Hiring Manpower.
Employees’ salaries are a substantial part of a company's expenses as well as a payroll and accounting headache. Make sure you have a good business accounting department and recruit human resources professionals to find qualified staff.
10. Start business operations.
You've finally reached the finish line (or rather the starting line)! After going through these ten steps of starting a business, you are ready to start your own business with a solid foundation.
What are the sources of financing to start a business?
A business without financing is like a bird without wings; it won't fly high, that's for sure!
Securing the financing you need should be one of your priorities when starting a business, but what type of financing will you be able to obtain and from whom? Business financing can be done in many different ways!
A bank loan is the most common method of financing! In fact, Quebec SMEs use bank loans primarily to finance their start-up phase since banks offer loans with flexible and advantageous repayment terms.
With that in mind, obtaining such financing is conditional on the presentation of a complete and, above all, solid business plan! On the negative side, banks that lend to SMEs often require personal guarantees to secure their loan, which puts your personal interests at high risk.
Angel investors can also be the solution! These investors inject capital into a start-up company in exchange for shares and/or part of the control of the company. In other words, investors agree to inject money into your company without interest in exchange for shares in the company.
Although this method of financing is perfectly viable, it is difficult, to say the least, to find such investors, unless your growth potential is very promising and easy to demonstrate, which is rarely the case for a start-up company!
Love Money and Personal Investment. No one is forcing you to turn to financial institutions for cash. It is possible to provide the necessary funds yourself or to turn to your wealthy relatives to obtain the money you need. Of course, we recognize the limits of this method of financing!
Venture capital. Like angel investors, venture capital targets only companies with high growth potential. Venture capital differs from angel investors in that it is often a specialized company that invests large sums of money in a very high-risk company with a very high potential for return.
Angel investors, on the other hand, are involved only in the early stages of a company and invest smaller amounts of their own cash, although there are many similarities between the two.
Government grants could be another source of funding, so check your eligibility! The list of subsidy programs for businesses in Quebec and Canada is impressive and can give you a big boost in your finances during your start-up phase. Make sure you know which grants are available for businesses like yours.
What criteria influence your chances of obtaining business financing?
Whether you decide to approach a traditional financial institution such as a bank or an alternative investor, financing is never granted automatically. You must convince your potential lender of the quality of your business project and its bright financial prospects.
These select criteria will have a significant effect on your ability to obtain funding.
- The soundness of your business plan.
- Your experience in the field.
- Your financial situation and credit record.
- The guarantees you can provide (personal guarantees, sureties, mortgages, etc.)
How to increase your chances of obtaining the desired financing? Put together a solid report with the help of a lawyer! Lawyers are used to managing financial reports for start-ups and know exactly what lenders are looking for. They will help you present your business in the best possible light!
How do you protect your personal and financial interests when starting a business?
Starting a business from scratch inevitably involves risks, but those risks don't have to involve your personal interests. Indeed, business is business, and it doesn't have to interfere with your personal assets.
Unfortunately, many entrepreneurs fail to adequately protect themselves and find themselves personally liable for the company's debts. How can you avoid this?
Register your intellectual property rights. It takes years of effort to create a trademark, an industrial design, and even a copyright. You certainly didn't work that hard to have your ideas stolen or to have a dispute arise over an intellectual property issue. Instead, take the time to register your rights from the start of your business!
Give serious thought to incorporation. Incorporating a business has the effect of giving your business a legal identity. It becomes solely responsible for the obligations it incurs, both in terms of debts, and civil liability. Hence, it is an excellent way to protect your personal assets.
Avoid giving a personal guarantee at all costs! Even in the case of an incorporated business, you can be held responsible for the business' commitments if you personally guarantee the performance of its obligations. Whether it is at the financing stage or during contracts with partners, avoid giving a personal guarantee at all costs.
During the business start-up phase, you should consider putting these measures in place because after that, it will be too late! Make the decision right away to protect yourself with the help of the right legal mechanisms.
Is business start-up synonymous with incorporation?
As mentioned above, starting a business can be done under several business structures. Some of these structures include general partnerships, limited partnerships, sole proprietorships, joint ventures, etc.
Incorporation comes with some very interesting advantages! Separate legal identity, limited personal liability, and increased financing opportunities are just a few of the advantages of choosing incorporation for your business. In addition to these benefits, the tax advantages of incorporation can also optimize the profitability of the business.
In other words, incorporation comes with undeniable advantages, but it is all a matter of the circumstances of your business. A thorough review by a qualified incorporation lawyer is necessary to make the best choice.
Ask a business lawyer to analyze your business project from every angle including the business plan, the business structure, and financing options. Nothing is beyond the reach of business law practitioners from the JuriGo network.
Find a lawyer for your business start-up with JuriGo!
We are sure that you have come to realize that starting a business is a complex and intricate process!
Despite the challenges ahead, you can manage the tasks with the help of a business lawyer who specializes in business start-ups. All you have to do is find a competent professional who meets your criteria.
Finding the best lawyer is easier with JuriGo! Fill out our form at the bottom of the page to get connected to a business lawyer in your area, free of charge and without obligation!