Speaker Tony Redpath. Part of the CIBC Presents Entrepreneurship 101 lecture series. Read more and watch the video here: http://www.marsdd.com/Events/Event-Calendar/Ent101/2008/entrepreneurship-types-10292008.html * How do you incorporate? * What government agencies do you have to engage with (after all, they will want to tax all that money you are making)? * How do you start off plugging yourself into your customer community? Part of the CIBC Presents Entrepreneurship 101 lecture series. Read more and watch the video here: http://www.marsdd.com/Events/Event-Calendar/Ent101/2008/entrepreneurship-types-10292008.html

2. `
Nuts and Bolts of Starting
a Business
Presented by:
Tony Redpath
Vice President, Partner Programs
MaRS Discovery District
29 October 2008
Slide 2
MaRS

3. Basic Premise:
 When you start a business you have to fit into
an existing ecosystem.
 Thismeans establishing numerous links with
different groups:
 Customers
 Suppliers / Providers
 Government
 Regulatory bodies
 Trade Associations
Slide 3
MaRS

4. Your Ecosystem
Your You Your
Suppliers Inc. Customers
Slide 4
MaRS

5. Getting Incorporated
 Two choices:
 Federal incorporation
 Canada Business website
 http://www.canadabusiness.ca/gol/cbec/site.nsf/en/index.html
 Canada Business Corporations Act
 http://corporationscanada.ic.gc.ca/epic/internet/incd-dgc.nsf/en/
h_cs01914e.html
Slide 5
MaRS

6. Getting Incorporated (cont.)
 Two choices:
 Provincial incorporation
 Service Ontario website
 http://www.gov.on.ca/ont/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/
7_0_252/_s.7_0_A/7_0_252/_l/en?docid=STEL01_033449
 Business Corporations Act
 http://www.gov.on.ca/ont/portal/!ut/p/.cmd/cs/.ce/7_0_A/.s/
7_0_252/_s.7_0_A/7_0_252/_l/en?docid=STEL02_163189
Slide 6
MaRS

7. Getting Incorporated (cont.)
 A third choice – for the future:
 Delaware incorporation
 Needed to attract US investors
Slide 7
MaRS

8. The Tax Man Cometh ….
 Regardless of where you are incorporated, you
will have to register your company with a
variety of tax collectors:
 Federal Corporate Tax
 Provincial Corporate Tax
 GST/PST
Slide 8
MaRS

9. Lesson number 1: Get Help!
 “The
incorporation process can be very complex.
You may wish to obtain legal and tax advice to
assist you with the preparation of the incorporation
documents and shareholders' agreements.”
 Canada Business website
 Ballpark
cost to hire an accountant / lawyer to
handle all the above paperwork is $800 - $1500
Slide 9
MaRS

10. Your Ecosystem
Federal and
Provincial Govt.
Your You Your
Suppliers Inc. Customers
Accountant
Slide 10
MaRS

11. Do you have co-founders?
 You
will need a shareholders agreement – it can be 1
page or 100 pages, but it must cover, at a minimum:
 What is the ownership split (at the start; sweat equity vs salary)
 How are decisions made
 What are each person’s responsibilities
 Assignment of Intellectual Property
There are many other issues that can be covered in a shareholders
agreement (see Term Sheet lecture)
Legal advice is highly recommended
Slide 11
MaRS

12. Your Ecosystem
Federal and
Provincial Govt.
Your You Your
Suppliers Inc. Customers
Lawyer Accountant
Slide 12
MaRS

13. Are you going to have employees?
 More taxes – you need to remit payroll
deductions for income tax, Employment
Insurance, Canada Pension Plan (the good news
is that when you get the other federal tax
numbers, you will also be set up for payroll
taxes)
 You need to register with the Workplace Safety
and Insurance Board (WSIB)
 http://www.wsib.on.ca/wsib/wsibsite.nsf/Public/EmployerRegisterWSIB
Slide 13
MaRS

14. Your Ecosystem
Federal and
WSIB
Provincial Govt.
Your You Your
Suppliers Inc. Customers
Lawyer Accountant
Slide 14
MaRS

15. Company Name Registration
 Selecting and registering your business name
 Canada Business website
 http://bsa.canadabusiness.ca/gol/bsa/site.nsf/en/su06937.html
 Trademarks, patents
 Canadian Intellectual Property Office website
 http://www.cipo.ic.gc.ca/epic/site/cipointernet-internetopic.nsf/en/wr00034e.html
Slide 15
MaRS

16. Are you doing research and
development?
 Scientific Research and Experimental Development tax
credits (SREDs)
 A major advantage for Canadian companies
 http://www.cra-arc.gc.ca/sred/
 Claimants can apply for SR&ED investment tax credits for expenditures
such as wages, materials, machinery, equipment, some overhead, and
SR&ED contracts.
 Generally, a Canadian-controlled private corporation (CCPC) can earn an
investment tax credit (ITC) of 35% up to the first $2 million of qualified
expenditures for SR&ED carried out in Canada
 Scientific Audit and Financial Audit
 To qualify for the SR&ED program, work must advance the understanding
of scientific relations or technologies, address scientific or technological
uncertainty, and incorporate a systematic investigation by qualified
personnel.
Slide 16
MaRS

17. Networking
 You need to establish a commercial network
(just as you had an academic network)
 Trade Associations
 Trade Shows
 Scientific Conferences
 Regulatory Bodies
 Your Bank
 Regional networking organizations (e.g. MaRS)
 Professional bodies (e.g. PEO)
Slide 17
MaRS

18. Your Ecosystem
Federal and
WSIB
Provincial Govt.
Your You Your
Suppliers Inc. Customers
Bank Lawyer Accountant Trade associations
Trade Shows
Conferences
Regional Networks
Regulatory Bodies
Slide 18
MaRS

19. Some Don’t’s …
 Don’t run out and commit to a big office with lots of fancy
furniture – get the space that you need, shop at IKEA and
grow your space as necessary
 Don’t hire your relatives simply because they are
available – get the team that you actually need
 Don’t hire your lab mates – you are not building a
research lab, you are building a company
Slide 19
MaRS