Entrepreneurship 101 -  The Nuts and Bolts of Starting a Business
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`
       Nuts and Bolts of Starting
              a Business
   Presented by:

   Tony Redpath
   Vice President, Partner Programs
   MaRS Discovery District



   October 20th, 2010




                                      Slide 3



MaRS
Creating an Ecosystem…

       When you start an enterprise, you have to work within
       an existing ecosystem while seeking to create your own
       relationship network and ecosystem…
        Customers
        Suppliers / Providers
        Government
        Regulatory bodies
        Trade Associations




                                                                Slide 4



MaRS
Your Ecosystem..
       Just at the beginning…..




            Your      You      Your
          Suppliers   Inc.   Customers




                                         Slide 5



MaRS
What should be my first step?
       Incorporation
     For   Profit and Non Profit Organizations:
         For Profit Incorporation
               Federal   incorporation
                  – Canada Business website
                  – Canada Business Corporations Act
         Non Profit Organizations
               Canada    Non for Profit Corporations Act
               Non   for Profit Incorporators Handbook
                 Charitable Status



                                                            Slide 6



MaRS
Incorporation in Ontario

    Provincial   For Profit
        Incorporation
          Service Ontario website
          Business Corporations Act

       Provincial for Non Profit
        Organizations
          CRA Website




                                       Slide 7



MaRS
Incorporation in the US
        Moving South of the Border?

         For   Profit Options:
            Delaware incorporation
                  US   Investor Base


         Non   Profit Options
            Guide Star
            Filing Requirements – IRS
            L3C Legal Structure




                                         Slide 8



MaRS
After incorporation, taxes will follow
       ….

        Regardless of incorporation jurisdiction, taxes
        are a requirement
          Federal Corporate Tax
          Provincial Corporate Tax
          HST




                                                           Slide 9



MaRS
Rules of the Incorporation & Taxes
       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
     Approximate     cost to hire an accountant / lawyer to
       handle all the above paperwork is $800 - $1500




                                                               Slide 10



MaRS
Your Ecosystem
       The Expansion Continues


                               Federal and
                             Provincial Govt.




               Your                You               Your
             Suppliers             Inc.            Customers




                         Lawyer           Accountant



                                                               Slide 11



MaRS
Post Incorporation..
       Founders, partners & employees
        Youwill 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 12



MaRS
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)



                                                        Slide 13



MaRS
Your Ecosystem


                   Federal and
                                              WSIB
                 Provincial Govt.




               Your                 You                Your
             Suppliers              Inc.             Customers




                         Lawyer            Accountant



                                                                 Slide 14



MaRS
Where should I register my
       enterprise name?
     How   do I register my enterprise name?
        Canada Business website
     How   do I seek information about trademarks &
       patents?
        Canadian Intellectual Property Office
         website




                                                       Slide 15



MaRS
Types of Organizations
       Research and Development
    Scientific   Research and Experimental Development tax credits
    (SREDs)
        A major advantage for Canadian companies
        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
Your Ecosystem


                   Federal and
           CRA                                WSIB
                 Provincial Govt.




               Your                 You                Your
             Suppliers              Inc.             Customers




                         Lawyer            Accountant



                                                                 Slide 17



MaRS
Beginning to build your network
        Establish a commercial network that compliments
        your existing networks

       Building Effective Relationships 101
          Professional Organizations & Trade Associations
          Be Strategic
               Too many to count….
               Why do I need to be there? Who do I need to meet?
          Scientific Conferences
          Trade Shows
       Partners
          Government Officials
          Your Bank

                                                                    Slide 18



MaRS
Your Ecosystem


                        Federal and
            CRA                                    WSIB
                      Provincial Govt.




                    Your                 You                Your
                  Suppliers              Inc.             Customers


                                                                Trade associations
                                                                   Trade Shows
                                                                   Conferences
           Bank               Lawyer            Accountant      Regional Networks
                                                                Regulatory Bodies


                                                                                     Slide 19



MaRS
Consider things NOT to do….

     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, old college university friends mates UNLESS
       they can offer you something to build your organization




                                                                          Slide 20



MaRS

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Entrepreneurship 101 - The Nuts and Bolts of Starting a Business

  • 2. +!'*#)$(/!%0#$&()("'%'!2")#31 )-..!'#$%&'"(&) <)%?)(/@'A)(7/:21%0#J%"A#2?#C%"%6% :)2(/B,(&-2(3%7/K%"6.%&A#L("'-&() OCTOBER 28, 2010 | MaRS Discovery District, Toronto, Canada .%"/C'-2$34/D"/83%%;7/J%1#C!'1#C%$!'%0M#I2"!%&6#I*%&.%/(-'!/%0) CREATING JOBS IN THE KNOWLEDGE ECONOMY !"#$%&'"(&)*!$#+!'*,,,, +!'*#/02)!"7#A(12'(#31 82&# 2-&# !"%-7-&%0# 9%:4# ;""2<%'!2"# 4-..!'5# +(=00# (>%.!"(# )-//())?-0# )'%&'@-$)# %"6# '*(# 923/5)("/<43((/C,%%$;7/ )-$$2&'#"((6(6@@?!"%"/!%0#%"6#2'*(&+!)(@@?2&#)-/*#("'(&$&!)()#'2#'%A(#?0!7*',#B('+2&A#+!'*# 9!"!)'&1#2?#:()(%&/*#%"6#;""2<%'!2"5#I&2<!"/(#2?#N"'%&!2 OCTOBER 28, 2010 | MaRS Discovery District, Toronto, Canada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| MaRS Discovery District, Toronto, Canada :)2(/M$%I23&35#L("'-&(K!"A#W&2-$#2?#8-"6)### # C$%K/O&23%5#I%&'"(&5#E(00!"7'2"#8!"%"/!%0#KI /2"?(&("/(#*2)')G CREATING JOBS IN THE KNOWLEDGE ECONOMY !"#$%&'"(&)*!$#+!'*,,,, .%"/0$12$34/5)6&+3'(7/82.7/9%:4#;""2<%'!2" /%'%01)'#$%&'"(&) Who should attend? H*2)(#!"'(&()'(6#!"#7&2+!"7#'*(#A"2+0(67(#(/2"2.1#!"#2-&#&(7!2",# 923/5)("/:3%%;/<%$6&+3'(7/=>5#H*(#H2&2"'2#;")'!'-'(#2?#I-30!/#I20!/1 82&# 2-&# !"%-7-&%0# 9%:4# ;""2<%'!2"# 4-..!'5# +(=00# (>%.!"(# )-//())?-0# )'%&'@-$)# %"6# '*(# )-$$2&'#"((6(6@@?!"%"/!%0#%"6#2'*(&+!)(@@?2&#)-/*#("'(&$&!)()#'2#'%A(#?0!7*',#B('+2&A#+!'*# +!'*#)$(/!%0#$&()("'%'!2")#31 )-..!'#$%&'"(&) N-&#%-6!("/(#+!00#!"/0-6(#0(%6(&)#%"6#("'&($&("(-&)#2"#'*(#?&2"'@0!"()#%"6#'*2)(#3(*!"6# OCTOBER 28, 2010 | MaRS Discovery District, Toronto, Canada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rogram: /2"?(&("/(#*2)')G .%"/0$12$34/5)6&+3'(7/82.7/9%:4#;""2<%'!2" $%"(0#6!)/-))!2")#+!'* 923/5)("/:3%%;/<%$6&+3'(7/=>5#H*(#H2&2"'2#;")'!'-'(#2?#I-30!/#I20!/1 9%:4#;""2<%'!2"#4-..!'#YZ[Z#@#G]Z#^9#@#_GZZ#I9 OCTOBER 28, 2010 | MaRS Discovery District, Toronto, Canada E),?)(/F!3(5#9/K(%"#E%')2"#C%$!'%0## .)(/<%33(5#:22')# # # # # # # # # :$(3/5$%*3;5#O%"(#P%&<(1#K%+1(&) 83+3%/*$(/?3%/<%'(+3(5#6392'!2" B('+2&A!"7#:(/($'!2"#@#_GZZ#I9#@#`GZZ#I9 CREATING JOBS IN THE KNOWLEDGE ECONOMY 0$#/E'3G3(+2$45#Q%&01#4(")(G#;""2<%'!2"#I%'!("'#H(/*"20271# !"#$%&'"(&)*!$#+!'*,,,, H'I$4/J%4'-25#R2S.%#L("'-&()# # # # # 8$,4/>2'113%+)(5#I&2?2-"6#9(6!/%0#;"/ @'&&'#/.$%*'&25#N&3!.(6#T;)&%(0U 9%:4#4-..!'#a!""(&#@##`GZZ#I9#b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ocation: 9%:4#a!)/2<(&1#a!)'&!/'5#[Z[#C200(7(#4'&(('5#H2&2"'25#C%"%6% /%'%01)'#$%&'"(&) )-$$2&'#"((6(6@@?!"%"/!%0#%"6#2'*(&+!)(@@?2&#)-/*#("'(&$&!)()#'2#'%A(#?0!7*',#B('+2&A#+!'*# !"6-)'&1#!""2<%'2&)5#61"%.!/#("'&($&("(-&)#%"6#'*2-7*'#0(%6(&)#?&2.#C%"%6%5#;)&%(0#%"6# '*(# D"!'(6# 4'%'(),# E(# +!00# (>%.!"(# %)$(/')# 2?# (/2"2.!/# 7&2+'*# !"# '%"7!30(# '(&.)# ?&2.# Who should attend? H*2)(#!"'(&()'(6#!"#7&2+!"7#'*(#A"2+0(67(#(/2"2.1#!"#2-&#&(7!2",# N-&#%-6!("/(#+!00#!"/0-6(#0(%6(&)#%"6#("'&($&("(-&)#2"#'*(#?&2"'@0!"()#%"6#'*2)(#3(*!"6# Ticket Prices:/ $199#c#P4H##FREE#H1$(#!"#d)'%&'-$e#!"#'*(#6!)/2-"'#/26(#%&(%# +!'*#)$(/!%0#$&()("'%'!2")#31 )-..!'#$%&'"(&) !"#$%&#'#%$(%$)'*#%!+,%-$)''+*(!+,%-$.#(/01(2#,%-$.#(/03,+2#,%$('.4(5#'!%$+6$&"('5#7 !"6-)'&1#!""2<%'2&)5#61"%.!/#("'&($&("(-&)#%"6#'*2-7*'#0(%6(&)#?&2.#C%"%6%5#;)&%(0#%"6# <)%?)(/@'A)(7/:21%0#J%"A#2?#C%"%6% :)2(/B,(&-2(3%7/K%"6.%&A#L("'-&() .%"1#$(&)$(/'!<()#)2#'*%'#+(#/%"#)*%&(#%"6#%6<%"/(#2-&#/200(/'!<(#23F(/'!<(), Program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`GZZ#I9 9%:4#4-..!'#a!""(&#@##`GZZ#I9#b#[ZGZZ#I9 923/5)("/<43((/C,%%$;7/ .%"1#$(&)$(/'!<()#)2#'*%'#+(#/%"#)*%&(#%"6#%6<%"/(#2-&#/200(/'!<(#23F(/'!<(), :)2(/B,(&-2(3%7/K%"6.%&A#L("'-&() 9!"!)'&1#2?#:()(%&/*#%"6#;""2<%'!2"5#I&2<!"/(#2?#N"'%&!2 .%"/C'-2$34/D"/83%%;7/J%1#C!'1#C%$!'%0M#I2"!%&6#I*%&.%/(-'!/%0) Location: 9%:4#a!)/2<(&1#a!)'&!/'5#[Z[#C200(7(#4'&(('5#H2&2"'25#C%"%6% +!'*#/02)!"7#A(12'(#31 $%"(0#6!)/-))!2")#+!'* 923/5)("/<43((/C,%%$;7/ Ticket Prices:/ 9!"!)'&1#2?#:()(%&/*#%"6#;""2<%'!2"5#I&2<!"/(#2?#N"'%&!2 $199#c#P4H## FREE #H1$(#!"#d)'%&'-$e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| C$%K/O&23%5#I%&'"(&5#E(00!"7'2"#8!"%"/!%0#KI OCTOBER 28, # MaRS Discovery District, Toronto, Canada :)2(/M$%I23&35#L("'-&(K!"A#W&2-$#2?#8-"6)### # C$%K/O&23%5#I%&'"(&5#E(00!"7'2"#8!"%"/!%0#KI /%'%01)'#$%&'"(&) CREATING JOBS IN THE KNOWLEDGE ECONOMY should attend? H*2)(#!"'(&()'(6#!"#7&2+!"7#'*(#A"2+0(67(#(/2"2.1#!"#2-&#&(7!2",# +!'*#)$(/!%0#$&()("'%'!2")#31 Who should attend? 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  • 3. ` Nuts and Bolts of Starting a Business Presented by: Tony Redpath Vice President, Partner Programs MaRS Discovery District October 20th, 2010 Slide 3 MaRS
  • 4. Creating an Ecosystem… When you start an enterprise, you have to work within an existing ecosystem while seeking to create your own relationship network and ecosystem…  Customers  Suppliers / Providers  Government  Regulatory bodies  Trade Associations Slide 4 MaRS
  • 5. Your Ecosystem.. Just at the beginning….. Your You Your Suppliers Inc. Customers Slide 5 MaRS
  • 6. What should be my first step? Incorporation   For Profit and Non Profit Organizations:   For Profit Incorporation   Federal incorporation – Canada Business website – Canada Business Corporations Act   Non Profit Organizations   Canada Non for Profit Corporations Act   Non for Profit Incorporators Handbook   Charitable Status Slide 6 MaRS
  • 7. Incorporation in Ontario  Provincial For Profit Incorporation   Service Ontario website   Business Corporations Act   Provincial for Non Profit Organizations   CRA Website Slide 7 MaRS
  • 8. Incorporation in the US Moving South of the Border?   For Profit Options:   Delaware incorporation   US Investor Base   Non Profit Options   Guide Star   Filing Requirements – IRS   L3C Legal Structure Slide 8 MaRS
  • 9. After incorporation, taxes will follow ….  Regardless of incorporation jurisdiction, taxes are a requirement  Federal Corporate Tax  Provincial Corporate Tax  HST Slide 9 MaRS
  • 10. Rules of the Incorporation & Taxes 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   Approximate cost to hire an accountant / lawyer to handle all the above paperwork is $800 - $1500 Slide 10 MaRS
  • 11. Your Ecosystem The Expansion Continues Federal and Provincial Govt. Your You Your Suppliers Inc. Customers Lawyer Accountant Slide 11 MaRS
  • 12. Post Incorporation.. Founders, partners & employees  Youwill 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 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) Slide 13 MaRS
  • 14. Your Ecosystem Federal and WSIB Provincial Govt. Your You Your Suppliers Inc. Customers Lawyer Accountant Slide 14 MaRS
  • 15. Where should I register my enterprise name?   How do I register my enterprise name?  Canada Business website   How do I seek information about trademarks & patents?  Canadian Intellectual Property Office website Slide 15 MaRS
  • 16. Types of Organizations Research and Development   Scientific Research and Experimental Development tax credits (SREDs)  A major advantage for Canadian companies  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. Your Ecosystem Federal and CRA WSIB Provincial Govt. Your You Your Suppliers Inc. Customers Lawyer Accountant Slide 17 MaRS
  • 18. Beginning to build your network Establish a commercial network that compliments your existing networks   Building Effective Relationships 101   Professional Organizations & Trade Associations   Be Strategic   Too many to count….   Why do I need to be there? Who do I need to meet?   Scientific Conferences   Trade Shows   Partners   Government Officials   Your Bank Slide 18 MaRS
  • 19. Your Ecosystem Federal and CRA WSIB Provincial Govt. Your You Your Suppliers Inc. Customers Trade associations Trade Shows Conferences Bank Lawyer Accountant Regional Networks Regulatory Bodies Slide 19 MaRS
  • 20. Consider things NOT to do….   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, old college university friends mates UNLESS they can offer you something to build your organization Slide 20 MaRS