Should I use a lawyer to incorporate a company or just do it myself?
A question that many entrepreneurs ask themselves, especially when money is tight. Well, we’re a little biased but we would say use a “lawyer”.
The resources are certainly out there to incorporate yourself. The internet is a big place with lots of easily accessible information. And with BC having an online incorporation system, it makes it even easier!
Here are two common mistakes we see people make when they incorporate themselves and then get themselves into big messes:
“Well, I have a buddy that helped me out. He’s set up lots of companies so did me a favour and helped me out, then emailed me the documents. It was super easy. I didn’t need a lawyer.”
Well, in most of the cases when “buddy” helps out, “buddy has put his name in as the incorporator. That makes him the first shareholder of the company he just incorporated. Without allotting (or issuing) any shares, this means corporate resolutions, subscription for shares, printing share certificates and having them signed by the director, updating the Central Securities Registry, and paying for the shares, that “buddy” owns your entire company. Probably, not what either of you wanted, but alas, when your company grows and if you’re not buddies with “buddy” in the future, you will have a major (and expensive) problem.
“My business is growing and now I need to get a line of credit from the bank and they said that they need to see a bunch of documents and I have no idea what they’re saying to me.”
Once you’ve been in business for a few years and the company has been expanding, you may need some financing along the way and the bank will need to see a specific set of documents from your corporate records book. If you don’t have a corporate records book, then you’re going to have to see a lawyer to get one put together. This often costs more than having a company incorporated from the beginning and having a lawyer assist with maintaining the company.
We’re business lawyers so we can help you with your business. If you feel stuck or overwhelmed or just want to get things done properly the first time without breaking the bank (which you don’t need to do!), then chat with us.
We can assist you with your company from beginning to end:
- advising you on the legal aspects of whether you should incorporate
- choosing an appropriate share structure for your business, your family and your dreams
- putting together a proper corporate records book from the beginning so your business is ready for expansion when you are maintaining your company so that you cant spend your time on your business and not dealing with the legal aspects
advising you on your agreements with important relationships (leases with your landlord, supplier contracts, client service agreements, distribution agreements)
- helping you protect what you’ve worked so hard for
- buying other business for growth
- selling or passing the business to other family members
At the end of the day, you get the quality of legal services you pay for. So why not have the peace of mind that all that you have worked so hard for, was correctly and legally set up and maintained. You’ve spent too much of your sweat and time to risk it. One of our lawyers (all of whom also have a business degree!) would be happy to walk you through the process and share our legal knowledge so you don’t have to figure it out.
It’s just one click away.
(originally posted August 27, 2012, updated May 10, 2016)