Startups and Emerging Companies
Starting a new business doesn’t have to be complicated. Our startup lawyers will guide you through the process of incorporating and organizing your corporate structure. We take the time to learn about your business and ensure that our approach is tailored to your business needs.
Startups Made Simple
Whether you are a tech-focused startup or small business, we will guide you through the process of forming and organizing your business.
Incorporate and Prepare Corporate Records
The founders of a startup should agree to a shareholders agreement outlining the governance of the Company and other rights and restrictions.
Structure Your Startup and Vesting
If necessary, we can plan for future equity investment in a cap table and help you incentivize founders and employees with share vesting or stock options.
Shareholders Agreement
The founders of a startup should agree to a shareholders agreement outlining the governance of the Company and other rights and restrictions.
Assign IP to Corporation
The founders and anyone else who worked on software or other intellectual property (IP) prior to incorporation must transfer ownership of the IP to the Company after it has been incorporated.
Benefits of Incorporating Your Startup
Once you have an idea and a business plan, the next step is to turn your dream into a reality by starting your business. If you are a small business, you can operate as a sole proprietorship, but if you intend on growing your startup and raising capital, we recommend incorporating a company to operate your business. These are some of the benefits of incorporating.
Limited Liability
Generally, owners are not personally liable for debts, obligations and acts of the corporation.
Issue Equity for Investment
Equity (ownership) in the business can be exchanged for monetary investment. This is done by issuing ``shares`` to investors.
Possible Tax Advantages
Corporations may provide flexibility and advantages in terms of tax planning.
Exists as a Separate Legal Person
A corporation is a separate legal entity whose ownership can be transferred and exist beyond the life of its original founders.
Additional Considerations for Startups
Hiring Employees/Contractors
As your business grows, you may need to begin hiring staff. You can do so by hiring an employee or a contractor.
Business Contracts
We help identify standard contracts you should develop for your business. We also review contracts clients were presented to ensure their protection.
Trademarks Protection
Protecting your brand through the registration and copyright of trademarks becomes essential to the protection of your business.
Employee Stock Option Plans
We can help you prepare Employee Stock Option Plans (ESOP) to incentivize early employees and contractors.
Community Partners
Oziel Law is ranked Tier 1 for Technology Law in Toronto in Best Law Firms™ – Canada (2025 and 2026). Allan Oziel has been recognized in The Best Lawyers in Canada™ for Technology Law since 2022.
Our Startup Lawyers
Corporate and technology lawyers who work with founders from incorporation through their first financings and beyond.
Startup News and Insights
Practical legal guidance for founders building and funding Canadian startups.
Frequently Asked Questions about Startup Law
Should I incorporate federally or provincially?
Both give your company limited liability. A federal corporation (under the Canada Business Corporations Act) protects its name across Canada and is often preferred by companies planning to raise capital or expand, but it must still register in each province where it carries on business, and at least 25% of its directors must be resident Canadians. An Ontario corporation can be simpler if you will operate mainly in Ontario, and Ontario no longer has a director residency requirement. We help you choose based on your plans for investors, hiring and expansion.
When do founders need a shareholders' agreement?
As soon as there is more than one founder or any outside investor. A shareholders' agreement sets out how decisions are made, what happens if a founder leaves, vesting, restrictions on selling shares, rights of first refusal, and drag-along and tag-along rights. Putting it in place early is far cheaper than resolving a dispute later, and investors will look for it in due diligence. When you are ready to raise money, our venture capital team handles the financing documents.
Should founders' shares vest?
Usually, yes. A common arrangement is four years of vesting with a one-year cliff, documented through reverse vesting on founders' shares. Vesting protects the company and the remaining founders if someone leaves early, and most investors expect it before they invest.
How do we make sure the company owns its intellectual property?
Every founder, employee and contractor who creates code, designs, content or inventions should sign an agreement that assigns their IP to the company and waives their moral rights. Without these assignments, the IP may legally belong to the individual. Missing assignments are one of the most common problems we find in startup due diligence. See our IP management and agreements services.
How do we set up a stock option plan for employees?
The board adopts a written option plan that reserves a pool of shares, and each grant is documented with an option agreement. If the company is a Canadian-controlled private corporation (CCPC), employees generally do not pay tax when they exercise their options; tax is deferred until they sell the shares, and part of the gain may qualify for a deduction if conditions are met. The size of the pool and the vesting terms should match your hiring plan and what investors will expect.
How much do startup legal services cost?
Where possible, we try to offer a fixed-fee Startup Program to eligible startups, with a defined scope tailored to their early-stage needs. Availability and fees depend on the startup and the work required. We can also discuss custom support and flexible payment options where appropriate. Visit Launch Your Startup to learn more.
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